India's economy is poised for its slowest growth in four years, with GDP expected to expand by 6.4% in fiscal 2024-25.
The first advance estimates, released by the Central Statistics Office ahead of the Union Budget, show a significant slowdown in the economic trajectory.
The projection is in line with forecasts in a Bloomberg poll of economists, which pegged growth at 6.4%. The Reserve Bank of India also lowered its outlook for the previous fiscal, revising its previous estimate to 6.6% from 7.2%.
Gross value added (GVA), a crucial measure that excludes indirect taxes and subsidies, is expected to equal 6.4% GDP growth. Meanwhile, nominal GDP, the basis for budget calculations, is expected to rise by 9.7%.
Agriculture and allied sectors are projected to grow by 3.8% in 2024-25, a significant recovery from last year's 1.4% growth. Meanwhile, the construction sector and the financial, real estate and professional services sectors are expected to record strong growth rates of 8.6% and 7.3% respectively.
Personal final consumption expenditure, a key indicator of consumer demand, rose by 7.3% this fiscal, a sharp increase from the 4% growth seen in the previous year. Similarly, government final consumption expenditure rose to a growth rate of 4.1% as against 2.5% in the previous fiscal.
These figures set the stage for the government's fiscal strategy, shaping critical decisions as the Union Budget looms large.