India’s growth prediction for FY25 has been raised by the World Bank from 6.6% to 7%. This adjustment represents a more optimistic assessment of the nation’s medium-term economic performance. Recent economic data, however, offers mixed signals.
GDP Growth Slows in Q1FY25
India’s GDP growth for the April-June quarter of FY25 slowed to 6.7%, primarily due to reduced government spending linked to the Model Code of Conduct implemented for the General Elections, according to data released on August 30.
Forecasts from Different Agencies
Nomura has lowered its growth estimate for India to 6.7% from 6.9%. However, at its most recent Monetary Policy Committee meeting, the Reserve Bank of India (RBI) forecast a growth rate of 7.1% for Q1FY25. Goldman Sachs and J.P. Morgan have stuck to their 6.5% growth estimate for India’s economy in FY25, despite these changes.
Sector-Wise Performance
Current data also shows that various industries perform differently. The growth rate of the primary sector, which comprises mining and agriculture, decreased to 2.7% year over year from 4.2% during the same period in FY24. On the other hand, the manufacturing and electrical sectors in the secondary sector experienced strong yearly growth of 8.4%. But the services-related tertiary sector shrank to 7.2% growth from 10.7% in FY24.
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