Economic Survey 2024: India To See Slowdown In GDP Growth At 6.5-7 Per Cent In FY25

The document cautioned that any escalation in geopolitical tensions in 2024 could obstruct supply, resulting in a hike in commodity prices, inflationary pressures, and impacting capital flows

Finance Minister Nirmala Sitharaman tabled the Economic Survey for the 2023-24 fiscal year (FY24) on Monday. The survey noted that the Indian economy is set to witness a slowdown in growth in the current 2024-25 fiscal year (FY25), even as the performance in the preceding fiscal surpassed market expectations.

The survey projected a growth rate of 6.5 per cent to 7 per cent in FY25 for the Indian economy. However, the country clocked a GDP growth rate of 8.2 per cent in the preceding FY24. 

Sharing the outlook for the economy, the survey noted, “In the medium term, the Indian economy can grow at a rate of 7 per cent plus on a sustained basis if we build on the structural reforms undertaken over the last decade. This requires a tripartite compact between the Union Government, State Governments and the private sector.”

The document cautioned that any escalation in geopolitical tensions in 2024 could obstruct supply, resulting in a hike in commodity prices, inflationary pressures, and impacting capital flows. This could force the central banks to adopt a stricter monetary policy.

 

Further, hiring patterns in the economy are not expected to pick up significantly, specifically in the IT sector. At the same time, the survey said that exports of business, consultancy, and IT-enabled services could further expand capitalising on the government initiatives.

In FY24, the survey stated that the economy grew by more than 8 per cent in three out of four quarters as macroeconomic stability helped limit the impact of external shocks on the domestic level.

Elaborating on the medium-term outlook, the survey stated that the government need sto focus on bottom-up reform and strengthen the structural reforms to enhance sustainable, balanced, and inclusive growth in the economy. 

“The Medium-term growth outlook will happen in the context of the following global trends, namely, increased geo-economic fragmentation, a global push for self-reliance, looming climate change, rise of technology as the biggest strategic differentiator and limited policy space for countries across the world,” the document pointed out.