India’s gross domestic product (GDP) is forecasted to expand by 6.8% in fiscal year 2024-25
(FY25), a decrease from the 8.2% growth observed in the previous fiscal year, according to
ICRA.
The nation’s GDP growth slowed to a six-quarter low of 6% in the first quarter (Q1) of FY25
(April-June), down from 7.8% in Q4 FY24, largely due to a reduction in government capital
expenditure and a decline in urban consumer demand, the credit rating agency reported.
In Q1 FY24, growth was recorded at 8.2%. The first quarter of FY25 experienced a
temporary slowdown in some sectors, attributed to parliamentary elections and sluggish
government capital expenditure at both central and state levels, as cited by ICRA’s chief
economist, Aditi Nayar.
The Reserve Bank of India’s Consumer Confidence Survey indicated an unexpected decline
in urban consumer confidence, Nayar noted. Additionally, the lingering effects of the
previous year’s poor monsoon and an uneven start to the 2024 monsoon season hindered a
more widespread improvement in rural sentiment.
The combination of lower volume growth and reduced gains from commodity prices
impacted the profitability of some industrial sectors, she added.
“Overall, we anticipate a temporary slowdown in India’s GVA [gross value added] and GDP
growth in Q1 FY25 to 5.7% and 6% respectively,” Nayar concluded.
Menu
