India’s FY25 Outlook: Per Capita GDP to Rise by ₹35,000

The State Bank of India (SBI) has revised its GDP growth forecast for the financial year 2024-25 (FY25) to 6.3%, slightly below the National Statistical Office’s (NSO) projection of 6.4%. This adjustment reflects concerns over a slowdown in lending and manufacturing, coupled with a high base effect from the previous year. Despite these challenges, per capita nominal GDP is expected to increase by ₹35,000 compared to FY23, indicating a positive trend in individual economic well-being.

Key Factors Influencing Economic Growth

Agriculture Sector: Projected to grow by 3.8% in FY25, up from 1.4% in FY24, driven by robust policy measures and public infrastructure development.

Industry and Services: Expected to experience a slowdown, with industry growth at 6.2% (down from 9.5% in FY24) and services at 7.2% (slightly down from 7.6% in FY24).

Private Consumption: Anticipated to grow at 7.3%, up from 4% in FY24, supported by strong agricultural growth and lower food inflation.

Investment Growth: Projected at 6.4%, a decline from 9% in the previous year, with no significant rebound expected in the second half of the financial year.

Implications for Economic Policy

The expected increase in per capita nominal GDP suggests an improvement in individual economic well-being, even amidst a deceleration in overall economic growth. Policymakers may need to focus on sustaining growth in the agriculture sector and stimulating private investment to maintain economic momentum. Addressing challenges in the manufacturing and services sectors will be crucial for achieving balanced and sustainable economic development.

Summary of the news