Projected Growth of Per Capita Nominal GDP in FY25 to Exceed FY23 by Rs 35,000: Analysts
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New Delhi, Jan 8 (NationPress) In spite of a deceleration in real GDP growth, India's per capita nominal GDP is forecasted to witness a substantial rise in FY25, increasing by at least Rs 35,000 compared to FY23, according to economists.
The initial advance estimate (AE) of GDP for FY25 released by the National Statistical Office (NSO) projects GDP growth at 6.4 percent. Additionally, the growth of gross value added (GVA) is also anticipated to be 6.4 percent. Meanwhile, nominal GDP growth is expected to remain relatively stable, with an increase of 9.7 percent in FY25 (compared to 9.6 percent in FY24).
“Historically, the discrepancy between the Reserve Bank of India’s estimate and the NSO’s estimate typically falls within the range of 20-30 basis points; thus, the 6.4 percent estimate for FY25 appears to be within reason. However, we believe that GDP growth for FY25 could hover around 6.3 percent, showing a downward bias,” commented Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser at the State Bank of India.
“Driven by strong policy initiatives and coordinated efforts to develop physical and digital public infrastructure, along with the formalization of financing, the Agriculture and Allied Activities sector is projected to expand by 3.8 percent in FY25 (up from 1.4 percent the previous year),” Dr. Ghosh highlighted.
In contrast, the service sector is expected to grow by 7.2 percent in FY25, down from 7.6 percent in FY24.
Key contributors to this positive growth include government consumption, projected to rise by 8.5 percent in nominal terms (and 4.1 percent in real terms), as well as exports, which have shown a robust growth of 8 percent (with 5.9 percent in real terms).
Nikhil Gupta, Chief Economist at MOFSL Group, noted that NSO projections indicate a rebound in consumption alongside a slowing of investments in the latter half of FY25.
“Private consumption is anticipated to grow 7.8 percent year-on-year in the second half of FY25 (compared to 6.7 percent in the first half of FY24 and 4 percent in the same period), while government consumption is expected to increase by 6.1 percent in the second half (up from 2 percent and 2.5 percent), and total investment is projected to rise by 5.8 percent compared to 6.5 percent and 9.4 percent in previous periods,” Gupta explained.
Rajani Sinha, Chief Economist at CareEdge Ratings, stated that consumption growth is expected to pick up in the second half of the fiscal year compared to the first half.
“Healthy agricultural growth and a potential moderation in food inflation should foster increased consumption in the upcoming months. Sustained consumer spending will further encourage private investment,” she added.
