FY25 GDP advance estimates: Govt pegs economic growth at four-year low of 6.4%

India's real gross domestic product (GDP) growth is expected to slip to a four-year low of 6.4% in the financial year 2024-25, as compared to 8.2% in 2023-24, as per the first advance estimates released by the government today. This would be the first time in four years (2021-22 to 2024-25) that GDP growth will slip below the 7% mark.

“Real GDP has been estimated to grow by 6.4% in FY 2024-25 as compared to the growth rate of 8.2% in Provisional Estimate (PE) of GDP for FY 2023-24. Nominal GDP has witnessed a growth rate of 9.7% in FY 2024-25 over the growth rate of 9.6% in FY2023-24,” Ministry of Statistics and Programme Implementation (MoSPI) says in a release today.

The advance estimate, which is used for various Budget calculations, is going to be shocker for the economy, which is already battling with depreciating rupee and higher inflation. In the first half of the current fiscal, the country’s GDP grew by 6.7% in April-June quarter, followed by near two-year low of 5.4% in July-September period.

As per the government data, the estimated growth rate of Real Gross Value Added (GVA) is seen slowing down to 6.4% in 2024-25, as compared to 7.2% in 2023-24.

On the nominal growth front, GDP is expected to witness a growth rate of 9.7% in FY25 as compared to 9.6% in FY24. Nominal GVA has been projected at 9.3% for FY25 as compared to the growth rate of 8.5% in FY2023-24.

Sector-wise, real GVA of agriculture and allied sector has been estimated to grow by 3.8% during 2024-25 as compared to the growth of 1.4% witnessed during the last year that is 2023-24. The growth for ‘Construction’ sector and ‘Financial, Real Estate & Professional Services’ sector has been projected at 8.6% and 7.3%, respectively, during the FY 2024-25.

The report highlights that private final consumption expenditure (PFCE) at constant prices, is pegged at 7.3% for FY2024-25 over the growth rate of 4.0% in the previous financial year.

Meanwhile, government final consumption expenditure (GFCE) at constant prices is seen rebounding to a growth rate of 4.1% as compared to the growth rate of 2.5% in previous financial year.

In absolute terms, Real GDP or GDP at constant prices is estimated to touch ₹184.88 lakh crore in the financial year 2024-25, against the provisional estimate of GDP for the year 2023-24 of ₹173.82 lakh crore. Nominal GDP is estimated to attain a level of ₹324.11 lakh crore in the year 2024-25, against ₹295.36 lakh crore in 2023-24, showing a growth rate of 9.7%.

On the other hand, real GVA is estimated at ₹168.91 lakh crore in the year 2024-25, against the PE for the year 2023-24 of ₹158.74 lakh crore. Nominal GVA is projected at ₹292.64 lakh crore during FY2024-25, against ₹267.62 lakh crore in 2023-24.

The Reserve Bank of India (RBI), in a recent report, said that the GDP is expected to grow at 6.6% in FY25, due to rural consumption revival, increase in government consumption and investment, and growth in services exports.