Indian Economy Grows by 6.7% in Q1 FY25 Amid Mixed Forecasts

The Indian economy registered a 6.7% growth rate in the April-June quarter of FY25, down from 8.2% in the same period last year. Analysts provide mixed forecasts, projecting annual growth rates slightly lower or on par with RBI's 7.2% estimate.

The Indian economy expanded by 6.7% in real terms during the April-June quarter of the current financial year 2024-25, according to data from the Ministry of Statistics and Programme Implementation, released on Friday. This is a decline from the 8.2% growth registered in the same quarter last year.

The nominal GDP saw a growth of 9.7% in the April-June quarter of 2024-25, compared to last year's 8.5% growth rate. The Reserve Bank of India, in its recent monetary policy meeting, projected GDP growth for 2024-25 at 7.2%, with quarterly estimates placed between 7.1% and 7.3%.

India's GDP sustained an impressive growth rate of 8.2% during the financial year 2023-24. The economy grew by 7.2% in 2022-23 and 8.7% in 2021-22. Several global rating agencies have revised their growth forecasts for India upward, with the IMF raising its 2024 projection from 6.8% to 7%.

Post the GDP data release, Chief Economic Adviser V. Anantha Nageswaran noted that monsoon progress brightened the agriculture sector's outlook, the services sector remained positive, and the external sector was stable. He added that election season, which slowed capital investment, impacted the GDP figures.

Inflation control and rising consumption contribute positively to the overall growth. Analysts and economists provided mixed reactions:

Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI Research estimates a 7.1% annual growth rate.

Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank, retains a 6.9% GDP growth estimate for FY25.

Rajani Sinha, Chief Economist, CareEdge, anticipates a 7% growth, citing improved agricultural growth due to a good monsoon and increased government expenditure.

Dharmakirti Joshi, Chief Economist, CRISIL, forecasts a 6.8% growth due to improved agricultural income and lower food inflation.

Sujan Hajra, Chief Economist, Anand Rathi Shares and Stock Brokers, predicts a 7% GDP growth, supported by strong equity market performance and stable monetary policy rates.

Dr. DK Srivastava, Chief Policy Advisor, EY India, stressed the need for accelerated infrastructure spending to meet GDP growth targets.

(With inputs from agencies.)