India’s GDP Grows 6.2 Per Cent In Q3; FY 2024-25 Growth Pegged At 6.5 Per Cent Amid Manufacturing, Mining Slump

India’s economic growth witnessed a moderation in the third quarter (Q3) of Financial Year (FY) 2024-25, with Real GDP expanding by 6.2 per cent, compared to the 9.5 per cent growth recorded in Q3 of FY 2023-24, according to data released by the National Statistical Office (NSO) on Friday (28 February).

Meanwhile, the Nominal GDP for Q3 2024-25 registered a growth rate of 9.9 per cent, reflecting a slowdown from the previous year’s robust pace.

Annual GDP Growth for FY 2024-25

For the full fiscal year 2024-25, India’s Real GDP is estimated to grow at 6.5 per cent, significantly lower than the 9.2 per cent growth recorded in FY 2023-24. The sluggish performance of the manufacturing and mining sectors has been a key factor contributing to this moderation.

Strong Economic Performance in FY 2023-24

Despite the slowdown in the current fiscal year, India recorded an impressive 9.2 per cent GDP growth in FY 2023-24, the highest in the past 12 years, excluding the pandemic-induced rebound in 2021-22.

This growth was primarily driven by a double-digit expansion in key sectors, including Manufacturing (12.3 per cent), Construction (10.4 per cent), Financial, Real Estate & Professional Services (10.3 per cent).

Sector-Wise GDP Growth Estimates for FY 2024-25

The NSO’s Second Advance Estimates provide a detailed sectoral breakdown for FY 2024-25, highlighting the varying growth trajectories across different industries:

• Agriculture, Livestock, Forestry and Fishing: Projected to grow at 4.6 per cent, up from 2.7 per cent in FY 2023-24.

• Mining: Growth expected at 2.8 per cent, marginally lower than 3.2 per cent in the previous year.

• Manufacturing: Estimated to expand at 4.3 per cent, a sharp decline from the 12.3 per cent growth recorded in FY 2023-24.

• Electricity, Gas and Water Supply: Anticipated to grow at 6 per cent, down from 8.6 per cent in the previous fiscal year.

• Construction: Expected to maintain a strong growth rate of 8.6 per cent, though slightly lower than 10.4 per cent in FY 2023-24.

• Trade, Hotels, Transport and Communication: Growth projected at 6.4 per cent, moderating from 7.5 per cent YoY.

• Financial Services and Real Estate: Estimated to expand at 7.2 per cent, down from 10.3 per cent in FY 2023-24.

• Public Administration and Defence: Growth remains steady at 8.8 per cent YoY.

Consumption and Investment Trends

The Private Final Consumption Expenditure (PFCE), a key indicator of household spending, is projected to grow at 12.3 per cent in 2024-25, an improvement from 9.7 per cent in 2023-24. This suggests resilient consumer demand, despite economic headwinds.

Meanwhile, Government Final Consumption Expenditure (GFCE) is estimated to grow at 8.2 per cent, declining from 12.6 per cent in the previous year, indicating a reduction in government spending.

Gross Fixed Capital Formation (GFCF), which represents investment in fixed assets, is expected to expand by 6.9 per cent, compared to 9.2 per cent YoY, reflecting a slowdown in capital expenditure and infrastructure investments.