The Indian government has estimated India’s gross domestic product (GDP) growth at 6.5% for the financial year 2024-25. This estimate was revised downward due to the decline in gross fixed capital formation and private consumption during the September quarter.
Previously, the International Monetary Fund, i.e. the IMF, had maintained its estimate of 7%. At the same time, the GDP estimate for the financial year 2025-26 was also kept at 6.5 per cent. On October 9, the RBI had maintained its forecast for Indian GDP growth for FY25 at 7.2%.
In August, the World Bank had increased its forecast for India’s GDP growth for the financial year 2024-25 from 6.6% to 7%. Then, the World Bank had said that in the last financial year 2024, Indian economy grew at 8.2%, which was the fastest.
GDP growth fell to 5.4% between July and September
India’s GDP growth fell to 5.4% in the July-September quarter of fiscal 2025. This was the slowest growth in seven quarters. GDP growth remained slow due to the poor performance of the manufacturing sector. The National Statistics Office released this data today, November 29.
Previously, growth in the third quarter of 2023 was 4.3%. While in the same quarter a year ago (Q2FY24), it was 8.1%. In the last quarter, i.e. Q1 of FY25, it was 6.7%. India’s GVA grew by 5.6% in the July-September quarter. GVA growth in the same quarter a year ago was 7.7%. While in the last quarter, GVA growth was 6.8%.
India remains the fastest growing economy among major countries
Despite slow GDP growth, India remains the fastest growing economy among major economies. China’s GDP growth in the July-September quarter this year was 4.6%. While Japan’s GDP grew at the rate of 0.9%.
What is GDP?
GDP is one of the most commonly used indicators to track the health of the economy. GDP represents the value of all goods and services produced in a country during a given period. Also included are foreign companies that produce within the country’s borders.
There are two types of GDP
There are two types of GDP. Real GDP and nominal GDP. In real GDP, the value of goods and services is calculated at the base year value or at a stable price. Currently, the base year for calculating GDP is 2011-12. While nominal GDP is calculated at current prices.
How is GDP calculated?
A formula is used to calculate GDP. GDP=C+G+I+NX, here C means private consumption, G means public expenditure, I means investment and NX means net export.
Who is responsible for GDP fluctuations?
There are four important drivers for increasing or decreasing GDP. The first is you and me. Everything you spend contributes to our economy. Second, the growth of private sector businesses. It contributes 32% to GDP. Third, there is public spending.
This means how much the government spends to produce goods and services. It contributes 11% to GDP. And fourth, net demand. For this, India’s total exports are subtracted from total imports, because India has more imports than exports, so its impact is negative on GDP.
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India’s GDP growth to be 7% in FY25: IMF says – Indian economy to grow 6.5% in FY26
The International Monetary Fund (IMF) has maintained India’s gross domestic product (GDP) growth estimate at 7 per cent for the financial year 2024-25. At the same time, the GDP estimate for the financial year 2025-26 was also kept at 6.5 per cent.