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Mint
12 hours ago
- Business
- Mint
Indian economy ‘doing quite well', may grow up to 6.8% in FY26, driven by FDI, urban spending: CEA Nageswaran
Chief Economic Adviser (CEA) Anantha Nageswaran said that the Indian economy is performing well and may achieve a growth rate at the upper end of its 6.3-6.8 per cent projection, provided there are continued measures to promote foreign direct investment and an increase in capital investment by the private sector, along with boosted urban consumption. "All in all, given the global environment, our economy is doing quite well," the CEA told reporters on Friday at a virtual press conference after GDP data for 2024-25 and January-March were released. 'And if we continue with the efforts to bring in more foreign direct investment and the private sector, if it continues its increase in capital investment, which we saw in 2024-25 and urban consumption picks up on the back of let's say, better capital formation, hiring and compensation, then we can probably achieve a growth rate which is at the higher end of this range (6.3-6.8 per cent),' he added. The Indian economy grew by 6.5% in real terms for FY25, aligning with expectations. As per the second advance estimates of National Statistical Office (NSO), the Indian economy was projected to grow at 6.5 per cent in 2024-25. The Reserve Bank of India (RBI) estimated 6.5 per cent GDP growth for the fiscal year 2024-25. Notably, India's GDP grew by 9.2 per cent in FY24, while the economy grew 7.2 per cent in FY23 and 8.7 per cent in FY22. The government also released the official GDP growth data for the January-March quarter on Friday. The economy grew 7.4 per cent for the quarter ended on March 31, 2025. Meanwhile, the growth rate of the Indian economy in the April-June, July-September, and October-December 2024 quarters stood at 6.7 per cent, 5.6 per cent, and 6.2 per cent, respectively. Speaking on the impact of the unusual onset of monsoon and its impact on the vegetable prices, Nageswaran said, 'To say there will be a problem as of now, I think every indication is that crop produce will be good and with adequate inventory, the benign food price trends will continue.' Monsoon rainfall is expected to be above normal in India, particularly in India's key rain-fed agricultural belt, as per IMD. Additionally, monsoon arrived early in several states this year. CEA stated that global growth for 2025 and 2026 is expected to be slow amid the global uncertainties. However, the forecast cuts will be smaller for India in the global cuts. Speaking on inflation, he further said that food inflation is likely to remain low due to a good harvest and above normal monsoon. 'Food Inflation remains benign due to good rabi harvest, higher summer sowing, healthy procurement, and above-normal monsoon. Exports remain robust, forex reserves provide 11 months of import cover. Declining crude oil prices will potentially lower import bills, create fiscal space and alleviate external economic pressures,' CEA said. The government maintains its outlook for 2025-26 growth at 6.3-6.8 per cent, driven primarily by private consumption, particularly the rural rebound, and growth in services exports. Various agencies have projected India's growth to fall within the range of 6.3-6.7 per cent for 2025-26. (With inputs from agencies)
Times of Oman
14 hours ago
- Business
- Times of Oman
Indian economy doing well, may achieve growth at higher end of 6.3-6.8% projection in FY26: CEA
New Delhi: Chief Economic Adviser (CEA) Anantha Nageswaran on Friday affirmed that the Indian economy is doing well and may achieve a growth rate at the higher end of its 6.3-6.8 per cent projection. "All in all, given the global environment, our economy is doing quite well," the CEA told reporters at a virtual press conference, soon after the GDP data for 2024-25 and January-March were released. "And if we continue with the efforts to bring in more foreign direct investment and the private sector, if it continues its increase in capital investment, which we saw in 2024-25 and urban consumption picks up on the back of let's say, better capital formation, hiring and compensation, then we can probably achieve a growth rate which is at the higher end of this range (6.3-6.8 per cent)." As was widely expected, the Indian economy grew by 6.5 per cent in real terms in the recently concluded financial year 2024-25. According to NSO's second advance estimates, the country's economy was projected to grow at 6.5 per cent in 2024-25. The Reserve Bank of India had projected 6.5 per cent GDP growth for the fiscal year 2024-25. In 2023-24, India's GDP grew by an impressive 9.2 per cent, continuing to be the fastest-growing major economy. The economy grew 8.7 per cent and 7.2 per cent, respectively, in 2021-22 and 2022-23. On Friday, the official GDP growth data for the January-March quarter was also released. The economy grew 7.4 per cent during the quarter. During the April-June, July-September, and October-December 2024 quarters, the country's economy experienced real-term growth rates of 6.7 per cent, 5.6 per cent, and 6.2 per cent, respectively. Asked whether unusual monsoon rains will impact vegetable prices, Chief Economic Adviser Anantha Nageswaran suggested against extrapolating a few weeks of prices and activity. "To say there will be a problem as of now, I think every indication is that crop produce will be good and with adequate inventory, the benign food price trends will continue," he explained. Amidst global uncertainty, the CEA said global growth for 2025 and 2026 is likely to slow, but India faces smaller forecast cuts in global forecasts. He supplemented high-frequency indicators for April 2025, showing strong Industrial and commercial activity in India. "Food Inflation remains benign due to good rabi harvest, higher summer sowing, healthy procurernent, and above-normal monsoon. Exports remain robust, forex reserves provide 11 months of import cover. Declining crude oil prices will potentially lower import bills, create fiscal space and alleviate external economic pressures," he said in a presentation. The government retains its outlook on 2025-26 growth at 6.3-6.8 per cent, with private consumption, especially the rural rebound, and resilient services exports as the key drivers. Multiple agencies have projected India's growth to be in the range of 6.3-6.7 per cent in 2025-26.
Hans India
16 hours ago
- Business
- Hans India
GDP growth at 4-yr low of 6.5% in FY25
New Delhi: India's economic growth slowed to 7.4 per cent in the January-March period and pulled down the annual growth rate for 2024-25 to a four-year low of 6.5 per cent, mainly due to the manufacturing sector, official data showed on Friday. The size of the Indian economy rose to Rs 330.68 lakh crore or about USD 3.9 trillion and set the stage for achieving the USD 5 trillion target in the next few years. In the previous 2023-24 fiscal year, the economy grew 9.2 per cent. China has registered an economic growth of 5.4 per cent in the first three months of 2025. The economic expansion was recorded at 7.4 per cent during January-March 2025, while it was 6.4 per cent in October-December 2024, 5.6 per cent in July-September 2024, and 6.5 per cent in the April-June quarter of the last financial year, according to economic estimates released by the National Statistics Office (NSO). The GDP had expanded by 8.4 per cent in the January-March quarter of 2023-24. The NSO, in its second advance estimate released in February, had projected the GDP growth for 2024-25 at 6.5 per cent. "Real GDP or GDP at Constant Prices is estimated to attain a level of Rs 187.97 lakh crore in FY2024-25, against the First Revised Estimates (FRE) of GDP for the FY 2023-24 of Rs 176.51 lakh crore, registering a growth rate of 6.5 per cent. "Nominal GDP or GDP at Current Prices is estimated to attain a level of Rs 330.68 lakh crore in the FY 2024-25 against Rs 301.23 lakh crore in FY 2023-24, showing a growth rate of 9.8 per cent," NSO said in a release. NSO further said that real GDP or GDP at Constant Prices in the fourth quarter of 2024-25 is estimated at Rs 51.35 lakh crore against Rs 47.82 lakh crore in the year-ago quarter, registering a growth rate of 7.4 per cent. Nominal GDP in Q4 of FY2024-25 is estimated at Rs 88.18 lakh crore against Rs 79.61 lakh crore in Q4 of 2023-24, showing a growth rate of 10.8 per cent. Real gross value added (GVA) is estimated at Rs 171.87 lakh crore in the FY 2024-25, against the FRE for the FY 2023-24 of Rs 161.51 lakh crore, registering a growth rate of 6.4 per cent. Nominal GVA is estimated to attain a level of Rs 300.22 lakh crore during FY 2024-25 against Rs 274.13 lakh crore in FY 2023-24, showing a growth rate of 9.5 per cent. On an annual basis, the growth in the key manufacturing sector decelerated to 4.5 per cent from 12.3 per cent in 2023-24. However, in the agriculture sector, the output increased to 4.6 per cent in 2024-25 compared to 2.7 per cent in the preceding fiscal. During the fourth quarter, the manufacturing sector output slowed to 4.8 per cent from 11.3 per cent in the year-ago quarter. The construction segment grew 10.8 per cent in the quarter from 8.7 per cent in the corresponding period of 2023-24. The agriculture sector growth accelerated to 5.4 per cent from 0.9 per cent in the final quarter of the last fiscal. The electricity, gas, water supply, and other utility services segment grew 5.4 per cent during the fourth quarter down from 8.8 per cent in the year-ago period. GVA growth in the services sector -- trade, hotel, transport, communication and services related to broadcasting -- is estimated at 6 per cent in the fourth quarter marginally, lower than 6.2 per cent a year ago. Financial, real estate and professional services grew 7.8 per cent in the March 2025 quarter compared to 9 per cent in the year-ago period. Public administration, defence and other services posted almost flat growth at 8.7 per cent in the quarter.
Hindustan Times
21 hours ago
- Business
- Hindustan Times
India economy grew 6.5% in FY25, beating forecasts
The Indian economy grew 6.5% in fiscal year 2024-25 and 7.4% in the quarter ending March, according to data released by the National Statistical Office (NSO) on Friday that underlines the nation's position as the fastest growing economy in the world. In current dollar terms, India's gross domestic product (GDP) is now $3.9 trillion compared to $3.6 trillion in 2023-24, according to an estimate by research agency Crisil after the data was released. According to the International Monetary Fund, India is on pace to become the fourth largest economy in the world with GDP of $4.3 trillion in 2025-26. Pointing out that India is the fastest growing economy for the fourth year in a row, finance minister Nirmala Sitharaman said that all the engines of growth– manufacturing, services and agriculture-- have propelled the Indian economy in the January-March quarter and indicated that the prospects of a good monsoo would maintain the momentum in the current fiscal year. 'India is sustaining this growth as the fastest growing economy now for the fourth year continuously without a break, thanks to the work of our small, medium and large industries, which are coming in and making sure our manufacturing capacity, our service capacity, are all intact. And agriculture has also sustained us,' she said at an awards function in the Capital . The data shows that the Indian economy has lost momentum compared to fiscal year 2023-24 when the GDP growth was 9.2%. To be sure, that growth was largely a reflection of pent-up demand after the Covid pandemic, a fact also highlighted by Sitharaman in her speech. But private investment, required to sustain growth beyond 7%, continues to remain sluggish. Growth for the fiscal and the quarter was higher than most analysts' estimates. A Bloomberg poll of economists had expected annual GDP growth of 6.3% and 6.8% for the quarter. The primary reason for the divergence between analyst estimates and the actual numbers is the wide gap between GDP (7.4%) and Gross Value Added (6.8%) growth in the March quarter. GDP is the sum of GVA and indirect taxes minus subsidies. Sajjid Chinoy, Chief India Economist at J.P. Morgan, who had projected a 6.5% and 7.5% growth number for the fiscal year and the March quarter, that were closer to the actual numbers, had expected this variance due to a fall in subsidies. 'But, as with several GDP prints in recent years, the (GDP versus GVA) outturn will need careful interpretation, because it will be driven substantially by a sharp fall in subsidy payouts in the last quarter, compared to the previous year', Chinoy had written in a GDP preview research note released on May 28. To be sure, the March quarter GDP numbers are not surprising when seen in the context that even the second advance estimate of GDP released by the NSO in February had assumed a growth rate of 7.6% in the March quarter while projecting a 6.5% annual growth rate. While fiscal consolidation has played a role in the large gap between GDP and GVA growth in the March quarter, its impact was less than in 2023-24. India's fiscal deficit fell sharply from 5.6% in 2023-24 to 4.8% in 2024-25, according to the provisional data released on Friday. But it is expected fall only 40 basis points to 4.4% in 2025-26. With the larger economic situation largely unchanged between the second advance estimates released in February 2025 and provisional data released on Friday, what are the key takeaways from the disaggregated GDP data? Private consumption seems to have regained its primacy as the growth driver while capital formation and government spending seem to be losing steam. The latter is to be expected as government capex growth has already peaked and fiscal consolidation is weighing on government's revenue expenditure. Government Final Consumption Expenditure and Gross Fixed Capital Formation lost momentum growing at 2.3% and 7.1% in 2024-25 compared to 8.1% and 8.8% in 2023-24. Private Final Consumption Expenditure grew at 7.2% in 2024-25 compared to 5.6% in 2023-24. 'Consumption growth outpaced GDP, primarily driven by robust rural demand supported by a strong agricultural sector…We anticipate that consumption will remain robust in the current fiscal year, buoyed by favourable domestic factors such as normal monsoon patterns, the transmission of interest rate cuts by the Reserve Bank of India (RBI), and middle-class income tax benefits', Dharmakirti Joshi, Chief Economist, Crisil, said in a note. At the sectoral level, the growth slowdown was broad based in every sector except in agriculture which grew at 4.6% in 2024-25 compared to 2.7% in 2023-24. The slowdown was the sharpest in manufacturing, where the growth rate fell from 12.3% in 2023-24 to just 4.5%. It is important to underline that part of the slowdown in manufacturing is driven by indexation (accounting for inflation) issues. This is borne out from the fact that nominal growth in manufacturing in 2023-24 (10.9%) was lower than real growth (minus inflation) and it has gone back to being higher than real growth (6.3%) in 2024-25. Services, which account for more than half of GVA grew at 7.2% in 2024-25 compared to 9% in 2023-24. Its private components, namely, Trade, Hotels, Transport, Communication & Services related to Broadcasting, and Financial, Real Estate & Professional Services lost momentum. Public Administration, Defence & Other Services saw a small uptick in growth. RBI's Monetary Policy Committee (MPC) has projected a GDP growth of 6.5% for 2025-26 in April, which was a 20-basis point downgrade from the projection made in February 2025 on account of increased downside risks from the global economy. 'Government retains its outlook on FY26 growth at 6.3-6.8%, with private consumption, especially the rural rebound, and resilient services exports as the key drivers,' Chief Economic Advisor V Anantha Nageswaran said while reacting to the GDP numbers. 'Multiple agencies project India's growth to be in the range of 6.3 – 6.7 per cent in FY26. Amidst global uncertainty, global growth for 2025 and 2026 is likely to slow,' he added.
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Business Standard
21 hours ago
- Business
- Business Standard
India's GDP expands 7.4% in Q4 to meet annual growth estimates of 6.5%
India's economic growth rebounded to a four-quarter high of 7.4 per cent in the January-March period of 2024-25 (FY25), aligning with the annual growth estimate of 6.5 per cent, according to provisional estimates of gross domestic product (GDP) released by the National Statistics Office (NSO). The final-quarter performance outpaced expectations, beating both the Reserve Bank of India's (RBI's) forecast of 7.2 per cent and a Reuters poll of economists that had projected 6.7 per cent growth. Nominal GDP for the full financial year rose 9.8 per cent to ₹330.7 trillion, slightly above the ₹324.1 trillion estimated in the Union Budget. This boost helped the government perform marginally better on fiscal deficit, which stood at 4.77 per cent of GDP in FY25, against the revised estimate of 4.84 per cent. Gross value added (GVA) grew at a slower rate than GDP — at 6.8 per cent — in the March quarter, widening the gap between GDP and GVA due to a surge in net taxes (taxes minus subsidies), as government subsidy payouts contracted during the period. Now, economists believe uncertainty because of the tariff war triggered by US President Donald Trump's policies and weak urban demand will shape India's FY26 growth outlook, even as further policy rate cuts by the RBI will support economic recovery. 'The momentum of the economy, which picked up in the fourth quarter, is continuing into the first quarter (of FY26), and that's a good sign,' said V Anantha Nageswaran, chief economic advisor in the finance ministry, while briefing reporters after the release of GDP data. He said high-frequency indicators for April showed strong industrial and commercial activity, and noted that interest rate moderation and recent tax relief measures would likely support consumption. Sakshi Gupta, principal economist at HDFC Bank, noted that while FY25 GDP growth moderated from the previous year's 9.2 per cent, the economy recovered from the sluggish performance in the first half of FY25. 'Average growth for H2 stood at 6.9 per cent versus 6.1 per cent in H1FY25. Growth in the second half was supported by a rise in government capex and construction activity, healthy agriculture performance, and continued momentum in the service sector,' she said. Agriculture grew 5.4 per cent in the March quarter, buoyed by strong reservoir levels and robust rabi sowing. Manufacturing expanded 4.8 per cent — a three-quarter high rate — helped by subdued input cost inflation. The labour-intensive construction sector surged 10.8 per cent, marking a six-quarter high. The services sector expanded 7.3 per cent, with public administration, defence, and other government services leading the way with 8.7 per cent growth. However, segments like trade, transport, communication, and broadcasting recorded slightly slower growth at 6 per cent, down from 6.2 per cent a year earlier, despite the festival boost from events like the Mahakumbh. Financial, real estate, and professional services also slowed to 7.8 per cent from 9 per cent in the same quarter a year ago, possibly reflecting weaker credit and deposit growth. Public sector-driven services remained strong, as both central and state governments pushed to accelerate projects in the final three months of FY25. Net exports turned positive in the March quarter after three consecutive quarters of drag. 'The 8.3 per cent growth in exports in FY25 was mainly due to better performance of services, given that exports of goods were virtually flat,' said Madan Sabnavis, chief economist, Bank of Baroda. On the supply side, private final consumption expenditure growth moderated to 6 per cent, while government consumption spending declined 1.8 per cent, partly due to the high base of a year ago. Investment demand, measured through gross fixed capital formation, rose by 9.4 per cent in the March 2025 quarter. 'The seasonal rush by both Union and state governments to meet their capex targets, along with the private sector (there has been an increase in capex intentions based on the latest NSO survey data), appears to have provided succour to the investment demand in Q4FY25,' said Paras Jasrai, associate director, India Ratings. 'The pickup in investment demand is significant but needs to be watched for a sustainable trend in view of economic uncertainty and weak foreign investment demand as indicated by the net FDI inflow.' Rajani Sinha, chief economist, CareEdge Ratings, said the uneven pace of consumption recovery remained a key 'monitorable'. 'The strength in rural demand is expected to continue on the back of favourable monsoon prospects, healthy reservoir levels and upbeat agricultural output. However, the softness in urban demand continues to be an area of concern,' she said. Sinha also warned that despite the US placing reciprocal tariffs on hold for 90 days, global economic uncertainty was likely to persist. 'This is likely to weigh on the private investment impulses. Given this context, a broadbased and durable consumption recovery, along with a revival in the government's capex, becomes increasingly critical for a revival in the private capex cycle. Factoring all of these aspects, we expect GDP growth in FY26 to be 6.2 per cent,' she added.
