India's GDP Likely To Slip To 4-Year Low Of 6.4 Per Cent In FY25, Govt's Advance Estimates Show

While the Indian economy fared well in the first quarter of FY25 at 6.7 per cent, the growth weakened in the following July-September quarter and hit an almost two-year low of 5.4 per cent. 

India saw a slump in its growth in the 2024-25 fiscal year (FY25), first advance estimates from the government showed. The preliminary data released on January 7 stated that the growth of the Indian economy weakened to 6.4 per cent in the current financial year, marking the lowest level seen in four years.

The advance estimates released by the authorities noted that growth is estimated to settle under the 7 per cent mark for the first time in four years. The First Advance Estimates of Annual Gross Domestic Product (GDP) were released by the National Statistics Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) for the 2024-25 fiscal year (FY25).

While the Indian economy fared well in the first quarter of FY25 at 6.7 per cent, the growth weakened in the following July-September quarter and hit an almost two-year low of 5.4 per cent. 

The first half of the year saw growth average around 6 per cent and the latest data showed that the economy is likely to clock an average of less than 7 per cent in the latter half of the current financial year.

Notably, the services activity in December surged to a four-month high, while the manufacturing sector saw a 12-month decline in business activity. The UPI transactions in December also jumped 8 per cent in December 2024 in comparison to the preceding month. 

Last month, a study by Deloitte estimated the Indian economy to record a growth rate of 6.5 per cent to 6.8 per cent in FY25. In the latest meeting of RBI’s Monetary Policy Committee (MPC), the central bank projected the economy to clock a GDP of 6.6 per cent in the current financial year. This estimate stood below the earlier growth projections of the RBI of 7.2 per cent.