Indian economy relatively slowed in Q1-FY25, here's what experts have to say

New Delhi [India], August 30 : The Indian economy grew by 6.7 per cent in real terms in the April-June quarter of the current financial year 2024-25, Ministry of Statistics and Programme Implementation's official data showed on Friday.
Last year same quarter, India grew 8.2 per cent.
The nominal GDP has witnessed a growth rate of 9.7 per cent in the April-June quarter of 2024-25 as compared to the growth rate of 8.5 per cent same quarter of last fiscal year.
The Reserve Bank of India, in its latest monetary policy meeting, projected GDP growth for 2024-25 at 7.2 per cent, with growth for Q1 expected at 7.1 per cent, Q2 at 7.2 per cent, Q3 at 7.3 per cent, and Q4 at 7.2 per cent.
India's GDP grew by an impressive 8.2 per cent during the financial year 2023-24, continuing to be the fastest-growing major economy. The economy grew by 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22, according to official data.
Many global rating agencies and multilateral organizations have also revised their growth forecasts for India upwards.
In July, the International Monetary Fund (IMF) raised India's growth projections for 2024 from 6.8 per cent to 7 per cent, reinforcing the country's status as the fastest-growing economy among emerging markets and developing economies.
The Economic Survey tabled in Parliament last month "conservatively" projected India's real GDP growth at 6.5-7 per cent for 2024-25, acknowledging that market expectations are higher. Real GDP growth is the reported economic growth adjusted for inflation.
Soon after the GDP figures were released, Chief Economic Adviser V. Anantha Nageswaran told reporters at a virtual presentation that monsoon progress brightened the agriculture sector outlook, the services sector remained upbeat, and the external sector is stable despite headwinds.
He asserted that election season in India, which somewhat slowed capital investment, had impacted the GDP figures.
Inflation coming back under control and boosting consumption; and the increase in consumption as the overall share of GDP bodes well for the economy, he said.
Here are some of the reactions from experts and economists on the GDP data:
Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI Research:
Now with 6.7 per cent growth in Q1, the new annual projection would be 7.1 per cent. We believe that GDP growth for FY25 will be a tad lower than the RBI's estimate and 7.0 per cent growth looks more reasonable.
Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank:
While the 1QFY25 GDP growth has come in softer than expectations, the GVA (gross value added) has remained firm, with non-farm growth holding up well. We retain our GDP growth expectations of 6.9 per cent in FY2025, aided largely by rural demand and government spending while watching closely the likely fatigue in urban demand, private capex, and pace of global slowdown.
Rajani Sinha, Chief Economist, CareEdge:
For the full year FY25, we anticipate GDP growth to be 7 per cent, slightly below the RBI's projection of 7.2 per cent. In the subsequent quarters, the agricultural sector is expected to see improved growth due to a good monsoon, despite ongoing challenges pertaining to its distribution. An increase in the government's capital expenditure in the upcoming quarters and further pick-up in private capex will further support overall growth. Moreover, agri sector recovery and lower inflation will provide boost to consumption recovery in the coming quarters.
Dharmakirti Joshi, Chief Economist, CRISIL:
The low-base effect apart, improvement in agricultural growth, and lower food inflation will augur well for private consumption, particularly in rural areas. Higher agricultural growth will augment income and lower food inflation will improve discretionary spending ability. Net-net, we expect the economy to grow at 6.8 per cent GDP for this fiscal.
Sujan Hajra, Chief Economist and Executive Director, Anand Rathi Shares and Stock Brokers:
Looking ahead, we anticipate full-year GDP growth for the current financial year to align closely with our estimate of 7 per cent. This robust growth, coupled with falling inflation, is expected to support continued outperformance in the Indian equity market. However, the strong growth figures may prompt the Reserve Bank of India (RBI) to maintain the current monetary policy rates throughout 2024.
Dr DK Srivastava, Chief Policy Advisor, EY India, and Advisory Council to the 16th Finance Commission:
In the first quarter data, there is a clear message that the GoI should accelerate its infrastructure spending to make up for the negative growth in its capital expenditure in the first four months... Unless this is made up and converted into a positive annual growth of 17 per cent or above, the likelihood is that the annual real GDP growth may fall below 7 per cent.