India's economy is projected to expand at its slowest rate in four years during the 2024-25 fiscal year, as per preliminary estimates released by the government on Tuesday. The Gross Domestic Product (GDP) is anticipated to rise by 6.4% for the financial year ending March 31. This follows an 8.2% growth recorded in the previous fiscal year.
This rate of growth marks the slowest since the fiscal year 2020-21, during which economic output contracted by 5.8% amid the pandemic's impact. Moreover, this growth projection underperforms the government’s earlier forecast, which anticipated a 6.5% to 7.0% increase.
In December, the Reserve Bank of India revised its real GDP growth forecast for 2024-25, reducing it to 6.6% from an earlier estimate of 7.2%.
There is positive news within specific sectors: agriculture is expected to have enhanced its growth to 3.8%, up from 1.4% in the preceding fiscal year. The construction sector experienced an 8.6% expansion, while the financial, real estate, and professional services sector saw a growth of 7.3%.
Private consumption surged by 7.3%, a notable increase from the 4.0% growth registered in the previous fiscal year. Government expenditure rose by 4.1%, compared to a 2.5% increase in the prior year. However, the growth rate in manufacturing has decelerated to 5.3% from 9.9%.
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