India's GDP growth projected to slow down at 6.4%, lowest in four years
Economists attribute this deceleration to a mix of factors, including subdued export demand due to global economic uncertainties, and high inflation impacting domestic consumption;
India’s Gross Domestic Product (GDP) is projected to grow by 6.4 per cent in the fiscal year 2024-25, the lowest in four years. It is a marked decline from the 8.2 per cent growth recorded in FY24, according to data released by the government on Tuesday (January 7). The slowdown in growth reflects the challenges posed by both global and domestic economic factors.
In the second quarter of FY24, the Indian economy expanded at a slower-than-anticipated rate of 5.4 per cent, a decline from the robust 6.7 per cent growth seen in the first quarter. This moderation underscores the uneven pace of recovery in the post-pandemic period.
Also read: India's GDP growth to remain steady at 6.5% in FY25, FY26: EY report
Several factors at play
Economists attribute this deceleration to a mix of factors, including subdued export demand due to global economic uncertainties, and high inflation impacting domestic consumption.
India’s growth trajectory, while slower than the previous year, remains among the fastest in the world. The government’s continued focus on infrastructure development and the rollout of key reforms, such as the Production-Linked Incentive (PLI) schemes, is expected to provide some momentum to economic activity in the coming quarters.
However, headwinds such as volatile energy prices, geopolitical tensions, and an uneven monsoon season have added complexity to the economic outlook.
The data reflects the importance of bolstering domestic demand, enhancing private sector investments, and navigating external pressures effectively to maintain a sustainable growth path.