Bank of Baroda Projects India’s GDP Growth at 6.75-6.8% in FY25

In a recent report, the Bank of Baroda (BoB) has forecasted India’s gross domestic product (GDP) growth for fiscal years 2024-25, approximately 6.75-6.8%, with a growth rate of 6.8% estimated for the FY24, alongside insights into sectoral performance and economic indicators.

Projections by Various Institutions

• BoB projects India’s GDP to grow at approximately 6.75-6.8% in FY25, with a growth rate of 6.8% estimated for the current financial year.
• The International Monetary Fund (IMF) has revised its forecast to 6.7% for the current fiscal, showing a 40 basis points increase from its earlier estimate in October 2023.
• The World Bank expects growth rates of 6.3% and 6.4% for FY24 and FY25, respectively, driven by robust domestic demand and infrastructure spending.
• The Reserve Bank of India (RBI) has set a growth target of 7% for FY24.

Sectoral Analysis for Q3 FY24

• Agriculture: Projected growth of 2.1% in Q3 FY24, slower than anticipated due to lower food grain production in the kharif season.
• Industry: Expected to grow at 8% in Q3 FY24, following a significant growth of 13.2% in the previous quarter.
• Construction: Anticipated to maintain a solid pace driven by increased steel and cement output, supported by housing demand and government expenditure.

Performance of Services Sector

• Services sector witnessed a broad-based improvement in Q3 FY24, with growth at 6.7%, attributed to delayed festive spending and events like the World Cup.
• Subdued nominal GDP growth expected due to moderating prices, but government capital expenditure likely to bolster spending in the upcoming quarters.