India’s economy to grow at slowest pace in 4 years; manufacturing faces sharpest decline

The Indian economy is estimated to grow 6.4% in 2024-25 against 8.2% in the previous fiscal year, the National Statistical Office (NSO) said on Tuesday, January 7, 2025, in its first advance estimates of national accounts.

The projection is the lowest since the pandemic and lower than the recent Reserve Bank estimate of 6.6% for the current fiscal year ending March 2025, amid a general slowdown in consumer spending.

The nominal GDP has shown a slightly higher growth rate of 9.7% for FY 2024-25, above the 9.6% growth observed in FY 2023-24.

Releasing the first advance estimates of national income for 2024-25, the NSO said, “real GDP has been estimated to grow by 6.4% in FY2024-25 as compared to the growth rate of 8.2% in the Provisional Estimate (PE) of GDP for FY2023-24”.

The real Gross Value Added (GVA) has grown by 6.4% in FY 2024-25, down from the 7.2% growth in the previous fiscal year. In nominal terms, GVA growth has increased to 9.3% from 8.5% in FY 2023-24.

Among sectors, the real GVA for Agriculture and allied sectors is estimated to grow significantly by 3.8% in FY 2024-25, compared to a modest 1.4% growth in FY 2023-24.

The construction sector is projected to see a strong real GVA growth of 8.6% in FY 2024-25.

The Financial, Real Estate & Professional Services is also expected to perform well, with an estimated real GVA growth of 7.3% in the same period.

At constant prices, the Private Final Consumption Expenditure (PFCE) has seen a growth rate of 7.3% during FY 2024-25, up from 4.0% in the previous fiscal year.

The Government Final Consumption Expenditure (GFCE) at constant prices has rebounded with a growth rate of 4.1%, compared to a 2.5% growth in FY 2023-24.