Indian Economy Demonstrates Steady Growth, Projected to Remain Fastest-Growing Major Economy

India's economy grew 6.7% in Q1 of FY 2024-25, with future projections remaining robust. IMF and World Bank have revised their estimates upwards, affirming India’s status as the fastest-growing major economy.

The Indian economy registered a 6.7 percent growth in real terms for the April-June quarter of the current fiscal year 2024-25, according to official data from the Ministry of Statistics and Programme Implementation, released on Friday. The growth rate, however, marks a decline from the 8.2 percent recorded in the same quarter last year.

The nominal GDP observed a growth rate of 9.7 percent in the first quarter of 2024-25, compared to 8.5 percent during the same period the previous year. The Reserve Bank of India, in its recent monetary policy review, projected the country's GDP growth for 2024-25 at 7.2 percent, with quarterly expectations of 7.1 percent (Q1), 7.2 percent (Q2), 7.3 percent (Q3), and 7.2 percent (Q4).

Continuing its trajectory as the fastest-growing major economy, India achieved an 8.2 percent GDP growth during the financial year 2023-24. This follows growth rates of 7.2 percent in 2022-23 and 8.7 percent in 2021-22, as per official statistics. Global ratings agencies and multilateral bodies have also increased their growth forecasts for India.

In July, the International Monetary Fund (IMF) raised its growth projection for India in 2024 from 6.8 percent to 7 percent, reaffirming the nation's standing among emerging markets. Initially forecasted at 6.5 percent, the IMF's revision attributes the upward trend to strong domestic demand and a growing working-age population. The Economic Survey presented in Parliament last month predicted India's real GDP growth at a conservative 6.5-7 percent for 2024-25, noting higher market expectations. Real GDP growth reflects economic growth adjusted for inflation.

The World Bank also adjusted its GDP growth forecast for India for the fiscal year 2024-25 from 6.4 percent to 6.6 percent. Despite a slight moderation in expansion pace, India is projected to maintain its status as the fastest-growing economy among the world's largest economies, according to the World Bank's revised estimates.

(With inputs from agencies.)