First Advance Estimates: Ahead of 2025 Budget, India Poised for Slow Economic Growth of 6.4%

The Indian 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 Statistical Office just before the Union Budget, point to a significant slowdown in the economic trajectory.

This expectation is consistent with the expectations of a survey of economists conducted by Bloomberg, where growth reached 6.4%. The Reserve Bank of India also trimmed its forecast for the previous fiscal year, revising its previous estimate of 7.2% to 6.6%.

Gross value added, a crucial measure that excludes indirect taxes and subsidies, is expected to match GDP growth of 6.4%. At the same time, nominal GDP, the basis for budget calculations, is expected to rise by 9.7%.

The agriculture and allied sectors are expected to grow by 3.8% in 2024-25, a significant rebound from last year’s growth of 1.4%. Meanwhile, the construction sector and the financial, real estate and professional services sectors are expected to register strong growth rates of 8.6% and 7.3%, respectively.

Private final consumption spending, a leading indicator of consumer demand, rose 7.3% this fiscal year, a marked improvement from the 4% growth in the previous year. Likewise, government final consumption spending rebounded to a growth rate of 4.1%, compared to 2.5% in the last fiscal year.

These numbers pave the way for the government’s fiscal strategy, and shape crucial decisions as the Union Budget approaches its mega-sized scale.