First advance estimates of India’s real Gross Domestic Product (GDP) for FY 2024-25 released by the National Statistics Office (NSO) indicate that the country’s GDP will grow at 6.4%. This estimate is lower than the Reserve Bank of India’s (RBI) revised real GDP projections of 6.6% announced after its recent Monetary Policy Committee (MPC) meeting held in early December 2024. The RBI had earlier projected a 7.2% growth rate. The 2023-24 Economic Survey, presented alongside the Union Budget in July 2024, had projected real GDP growth between 6.5-7% for the financial year.  

The first advance estimates have factored in a 6.7% GDP growth in H2. GDP numbers for FY 2023-24 stood at 8.2% making the current projection the lowest in four years. The country’s real GDP for Q1 FY 2024-25 stood at 6.7% while Q2 GDP fell to 5.4%.

Despite lower projections for the annual GDP, certain sectors are expected to grow well. Agriculture and allied sectors, construction and financial, real estate and professional services sectors are anticipated to grow at 3.8%, 8.6% and 7.3% respectively.

The impact of these numbers is likely to be evident in the Union Budget to be announced on February 1 as well as the RBI’s MPC meeting to be held between February 5-7. The RBI has been maintaining a ‘neutral’ policy stance and has left the repo rate – the rate at which it lends to banks – unchanged to “remain unambiguously focused on a durable alignment of inflation with the target, while supporting growth.”

The NSO, a part of the Ministry of Statistics and Programme Implementation (MoSPI), uses the benchmark indicator method for making advance GDP estimations. Estimates available for the previous financial year are extrapolated using relevant indicators reflecting the performance of sectors.

Second advance estimates of the annual GDP will be released by the NSO on February 28 along with Q3 GDP numbers.

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