CRISIL expects India’s GDP growth to moderate to 6.8% in FY25

It expects India to log the fastest growth among major economies and fare better than 6.7-per cent growth seen in the decade preceding the pandemic.

CRISIL expects India’s GDP growth to moderate to 6.8 per cent in FY25 after 8.2 per cent in the last, weighed down by high interest rates and low fiscal impulse.
It expects India to log the fastest growth among major economies.
Rural demand may drive consumption.
GDP growth slowed at 6.7 per cent YoY in Q1 FY25, in line with CRISIL’s 6.8-per cent forecast.

On a positive note, last year’s laggards—agriculture and consumption—are poised to rise. Rural demand is expected to drive consumption, CRISIL, an S&P Global company, said in a recent macroeconomics report.

India’s GDP growth slowed in line with expectations: at 6.7 per cent year on year (YoY) in the first quarter (Q1) of FY25, in line with CRISIL’s forecast of 6.8 per cent.

The economy expanded at 7.8 per cent in Q4 FY24 and at 8.2 per cent in Q1 FY24.

Nominal GDP moderated as well to 9.7 per cent in Q1 FY25 from 9.9 per cent in Q4 FY24, but was higher than 8.5 per cent in the year-ago quarter.

Decline in government consumption spending was a drag on GDP growth. And reducing growth in net taxes limited the rise in GDP over gross value added (GVA) growth.

Also, despite healthy growth of 7 per cent, manufacturing was slower than in Q4 FY24. Non-agriculture growth rose to 7.6 per cent in Q1 FY25 from 7.3 per cent in Q4 FY24.

After a weak FY24, private consumption picked up significantly in Q1 FY25. A large part of the increase in consumer demand was owing to improving rural conditions.

Also, growth in fixed investments accelerated despite low government capital expenditure, indicating other private investments have gathered steam.

Fibre2Fashion News Desk (DS)