India's Economic Trajectory: Slowing Growth Amid Inflation Challenges

India's economy projected to grow at 6.4% in 2024-25, down from 8.2% in 2023-24, as per the Ministry of Statistics. The slowdown concerns policymakers dealing with high inflation. The Reserve Bank and Fitch Ratings have adjusted growth forecasts, amidst indicators of recovery in the third quarter.

The Indian economy is anticipated to expand by 6.4% in the 2024-25 fiscal year, a decline from the 8.2% growth observed in 2023-24, according to the Ministry of Statistics and Programme Implementation. This projection is slightly lower than the Reserve Bank of India's estimates.

The nominal GDP is forecasted to rise by 9.7% in 2024-25, marginally up from the previous year's 9.6%. However, underlying concerns persist as the real gross value added (GVA) also reflects a slowdown, with 6.4% growth compared to 7.2% the previous year. The agricultural sector, however, shows promise with a projected real GVA growth of 3.8%.

Despite the dire high inflation affecting urban consumption and prompting policy dilemmas, indicators suggest an economic recovery spurred by festive activities and rural demand towards the year's end. Nevertheless, revised growth forecasts from Fitch Ratings and the Reserve Bank highlight tempered expectations, spotlighting the challenges facing policymakers.

(With inputs from agencies.)