{"id":50256,"date":"2025-01-08T13:16:00","date_gmt":"2025-01-08T07:46:00","guid":{"rendered":"https:\/\/www.equentis.com\/blog\/?p=50256"},"modified":"2025-11-07T11:49:13","modified_gmt":"2025-11-07T06:19:13","slug":"fy25-gdp-at-6-4-but-agri-and-mfg-may-grow-in-h2","status":"publish","type":"post","link":"https:\/\/www.equentis.com\/blog\/fy25-gdp-at-6-4-but-agri-and-mfg-may-grow-in-h2\/","title":{"rendered":"FY25 GDP Growth at 6.4%, But Agri and Manufacturing Expected to Shine in H2"},"content":{"rendered":"<div id=\"bsf_rt_marker\"><\/div>\n<p><\/p>\n\n\n\n<p class=\"has-small-font-size\">Have you noticed the latest buzz around India\u2019s economic growth? You might be concerned about the future if you&#8217;re watching the numbers. The National Statistics Office (NSO) has released its first advance estimates, indicating that India\u2019s GDP growth for the fiscal year 2024-25 (FY25) is set to slow down to 6.4%. <\/p>\n\n\n\n<p class=\"has-small-font-size\">This figure marks the lowest growth rate in four years and falls short of the Reserve Bank of India\u2019s (RBI) projection of 6.6%. Let\u2019s break down what this means and why there\u2019s still a silver lining in the second half of the fiscal year.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\"><strong>Key Takeaways from GDP Estimates<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Real GDP Growth:<\/strong> 6.4% for FY25, down from 8.2% in FY24.<\/li>\n\n\n\n<li><strong>Nominal GDP Growth:<\/strong> Projected to grow by 9.7% in FY25, a slight increase from 9.6% in FY24.<\/li>\n\n\n\n<li><strong>Gross Value Added (GVA):<\/strong> Real GVA growth is expected to remain at 6.4%, compared to 7.2% in FY24.<\/li>\n\n\n\n<li><\/li>\n\n\n\n<li><strong>Sectoral Growth:<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Agriculture:<\/strong> 3.8% growth in FY25, up from 1.4% in FY24.<\/li>\n\n\n\n<li><strong>Construction:<\/strong> 8.6% growth in FY25, down from 9.1% in H1.<\/li>\n\n\n\n<li><strong>Services:<\/strong> Slight increase to 7.2% in FY25 from 7.1% in H1.<\/li>\n\n\n\n<li><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Expenditure Growth:<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>PFCE:<\/strong> 7.3% growth in FY25, up from 6.7% in H1.<\/li>\n\n\n\n<li><strong>GFCE:<\/strong> 4.1% growth in FY25, up from 2% in H1.<\/li>\n\n\n\n<li><strong>Investment Demand:<\/strong> Remains steady at 6.4% in FY<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Source: MOSPI<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading has-large-font-size\"><strong>Understanding the GDP Slowdown<\/strong><\/h3>\n\n\n\n<p>The NSO\u2019s estimate of 6.4% growth represents a significant deceleration from the 8.2% growth rate recorded in FY24. This slowdown is attributed to various factors, including subdued consumer demand and elevated <a href=\"https:\/\/www.equentis.com\/blog\/10-common-effects-of-inflation-on-the-economy\/\">inflation<\/a> <a href=\"https:\/\/www.equentis.com\/blog\/old-tax-regime-slabs\/\">rates<\/a>. In the first half of FY25 (H1), the economy grew at 6%, but the NSO anticipates an improved performance in the second half (H2), with GDP growth expected to rise to 6.7%.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXdsB3Ezp6njnUo_Lvpp14dPB9QB1QYeYeQAxX08Wf1LzJ13KiVIUfhvQBQWl_mTY4Az36pYV8081enpdStjn_HFbKsTZ7lvOZuFvUGh4gmkLkWKFwlOJ7QJ7LFzWmI_OlHkaFtc?key=4rgZ5Ih4kcmHPivG5lIKENW6\" alt=\"\" style=\"width:592px;height:auto\" title=\"\"><figcaption class=\"wp-element-caption\">Source: MOSPI<\/figcaption><\/figure>\n\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\"><strong>Breakdown of the Estimates<\/strong><\/h2>\n\n\n\n<p>The First Advance Estimates of GDP incorporate industrial production data from October and lead indicators up to December, projecting a stronger second half. The Gross Value Added (GVA) growth is also pegged at 6.4%, aligning with the GDP growth rate. This alignment suggests that indirect taxes and subsidies will likely balance each other out, maintaining overall economic stability.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\"><strong>Sectoral Insights: Agriculture and Manufacturing on the Rise<\/strong><\/h2>\n\n\n\n<p>One of the key highlights of the NSO\u2019s report is the anticipated improvement in the agriculture and manufacturing sectors during H2 FY25.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Agriculture:<\/strong> Agriculture grew by 2.7% in the first half, but the NSO estimates a robust 3.8% growth for the entire fiscal year. This uptick is expected due to healthy reservoir levels and favorable soil moisture conditions supporting rabi cultivation.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXfsCXLEaJxC_MWahGr61monR_DecFfSqY5Bjt3u05x5X2BkbzQskZ9UZCCMkUSQdMB-4cuSsnYOKPTEWSPrGINiajM1noBWif3vq4vcg9VLlFcDAu-7Rq6ZkHSHUffAkZH9qq0nmA?key=4rgZ5Ih4kcmHPivG5lIKENW6\" alt=\"\" style=\"width:666px;height:auto\" title=\"\"><figcaption class=\"wp-element-caption\">Source: MOSPI<br><\/figcaption><\/figure>\n\n\n\n<p><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Manufacturing:<\/strong> The manufacturing sector saw a 4.5% growth in H1 and is projected to increase to 5.3% in FY25. This growth is primarily driven by a likely recovery in domestic demand, which is crucial for sustaining manufacturing activities.<br><\/li>\n<\/ul>\n\n\n\n<p>While these sectors show promise, not all areas are set to perform equally. For instance, the labor-intensive construction sector is expected to slow down in H2, with growth dipping from 9.1% in H1 to 8.6% in FY25. On the other hand, the services sector is projected to see a marginal increase, growing from 7.1% in H1 to 7.2% in FY25.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\"><strong>Expenditure Trends: Private and Government Spending<\/strong><\/h2>\n\n\n\n<p>On the expenditure side, private and government spending is expected to grow faster in the second half of FY25 than in the first half.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Private Final Consumption Expenditure (PFCE):<\/strong> Estimated to grow by 7.3% in FY25, up from 6.7% in H1. This increase indicates stronger consumer spending, a positive sign for the economy.<br><\/li>\n\n\n\n<li><strong>Government Final Consumption Expenditure (GFCE):<\/strong> Projected to rise by 4.1% in FY25, compared to 2% in H1. Increased government spending can help sustain economic activities and support various sectors.<br><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXdiQuZZ2oj1N_XTNjpi5UrtyIpPX9yvZB1zwdUo6wY9jx3vFw2BFi9IGF5X3xQgSgJ_swaF4d0jpHUgPRSeJKcJfkJRXhjAoG0yWxQN3RDsqOn_t63773dLxo5EFysCyJjn7O8I?key=4rgZ5Ih4kcmHPivG5lIKENW6\" alt=\"\" style=\"width:650px;height:auto\" title=\"\"><figcaption class=\"wp-element-caption\">Source: MOSPI<\/figcaption><\/figure>\n\n\n\n<p><\/p>\n\n\n\n<p>However, investment demand, represented by gross fixed capital formation, is expected to grow at the same rate of 6.4% in FY25 as in H1. This stagnation suggests private investment is not picking up, which could concern long-term economic growth.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\"><strong>Inflation and Global Factors<\/strong><\/h2>\n\n\n\n<p>Inflation remains a significant concern, with the December inflation rate expected to exceed 5%. Although vegetable prices moderated somewhat during the season, it wasn\u2019t enough to counterbalance the substantial price increases observed in recent months.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.equentis.com\/blog\/key-global-events-that-can-influence-the-stock-market-this-week-3\/\">Global<\/a> uncertainties also affect the economic outlook. The incoming Trump presidency has added depreciation pressure on the rupee. <\/p>\n\n\n\n<p>Additionally, the US Federal Reserve will likely maintain its current stance in the upcoming January meeting, which could lead to higher US yields and further pressure on the rupee. Given these global factors and elevated inflation, the RBI is expected to adopt a cautious approach, possibly waiting for more evidence that inflation is moderating before considering any rate cuts.<br>Source:<a href=\"https:\/\/www.business-standard.com\/economy\/news\/fy25-gdp-growth-may-slip-to-4-yr-low-of-6-4-nso-s-first-advance-estimates-125010701221_1.html\" target=\"_blank\" rel=\"noopener\"> Business Standard<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\"><strong>Nominal GDP and Fiscal Deficit<\/strong><\/h2>\n\n\n\n<p>The NSO has estimated nominal GDP growth to be 9.7% for FY25, slightly lower than the 10.5% assumed in the <a href=\"https:\/\/www.equentis.com\/blog\/union-budget-2024-which-sectors-does-it-favour\/\">Budget<\/a>. This marginal slowdown could make it challenging for the government to achieve its fiscal deficit target of 4.9%. However, sluggish capital expenditure might lead to substantial savings for the government, helping it stay on track with fiscal consolidation efforts.<\/p>\n\n\n\n<p><strong>Conclusion<\/strong><\/p>\n\n\n\n<p>India\u2019s GDP growth for FY25 is projected to slow to 6.4%, the lowest rate in four years. While this may seem concerning, there are positive signs, particularly in the agriculture and manufacturing sectors, which are expected to perform well in the second half of the fiscal year. Improved consumer demand and increased government spending also support the economy. However, rising inflation and global uncertainties remain challenging, making understanding these factors important to grasping the economic outlook for the months ahead.<\/p>\n\n\n<div class=\"crp-list-container\"><h3 class=\"crp-list-title\">Related Posts<\/h3><ul class=\"crp-list\"><li class=\"crp-list-item crp-list-item-image-left crp-list-item-has-image\"><div class=\"crp-list-item-image\"><a href=\"https:\/\/www.equentis.com\/blog\/5-nse-multibagger-stocks-to-watch-for-in-2025\/\"><img decoding=\"async\" style=\"max-width: 50px; height: auto;\" width=\"50\" height=\"50\" src=\"https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2024\/12\/Multibagger-Stocks-of-2025-70x70.jpg\" class=\"attachment-50x50 size-50x50\" alt=\"multibagger stocks\" srcset=\"https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2024\/12\/Multibagger-Stocks-of-2025-70x70.jpg 70w, https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2024\/12\/Multibagger-Stocks-of-2025-150x150.jpg 150w\" sizes=\"(max-width: 50px) 100vw, 50px\" title=\"\"><\/a><\/div><div class=\"crp-list-item-title\"><a href=\"https:\/\/www.equentis.com\/blog\/5-nse-multibagger-stocks-to-watch-for-in-2025\/\">5 NSE Multibagger Stocks To Watch For In 2025<\/a><\/div><\/li><li class=\"crp-list-item crp-list-item-image-left crp-list-item-has-image\"><div class=\"crp-list-item-image\"><a href=\"https:\/\/www.equentis.com\/blog\/asian-stock-market-the-complete-guide\/\"><img decoding=\"async\" style=\"max-width: 50px; 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height: auto;\" width=\"50\" height=\"50\" src=\"https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2024\/12\/High-Dividend-Stocks-for-2025-70x70.jpg\" class=\"attachment-50x50 size-50x50\" alt=\"high dividend stocks\" srcset=\"https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2024\/12\/High-Dividend-Stocks-for-2025-70x70.jpg 70w, https:\/\/www.equentis.com\/blog\/wp-content\/uploads\/2024\/12\/High-Dividend-Stocks-for-2025-150x150.jpg 150w\" sizes=\"(max-width: 50px) 100vw, 50px\" title=\"\"><\/a><\/div><div class=\"crp-list-item-title\"><a href=\"https:\/\/www.equentis.com\/blog\/top-high-dividend-stocks-for-2025\/\">Top High Dividend Stocks for 2025<\/a><\/div><\/li><\/ul><\/div>\n\n\n<p class=\"has-ast-global-color-5-color has-vivid-red-background-color has-text-color has-background has-link-color wp-elements-a377517bdd8f600e0c2e7efd2ef366fd\">Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis \u2013 Research &amp; Ranking. We will not be liable for any losses that may occur. <a href=\"https:\/\/www.equentis.com\/blog\/mukul-agrawal-portfolio-shareholdings-investments-all-you-need-to-know\/\">Investments<\/a> in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by <a href=\"https:\/\/www.equentis.com\/blog\/sebi-registered-investment-advisor-meaning-eligibility\/\">SEBI<\/a>, membership of BASL &amp; certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Have you noticed the latest buzz around India\u2019s economic growth? If you\u2019re keeping an eye on the numbers, you might be concerned about what the future holds. The National Statistics Office (NSO) has released its first advance estimates, indicating that India\u2019s GDP growth for the fiscal year 2024-25 (FY25) is set to slow down to 6.4%. This figure marks the lowest growth rate in four years and falls short of the Reserve Bank of India\u2019s (RBI) projection of 6.6%. Let\u2019s break down what this means and why there\u2019s still a silver lining in the second half of the fiscal year.<\/p>\n","protected":false},"author":5,"featured_media":50257,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[948,11],"tags":[],"class_list":["post-50256","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock-market-news","category-economy"],"_links":{"self":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts\/50256","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/comments?post=50256"}],"version-history":[{"count":19,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts\/50256\/revisions"}],"predecessor-version":[{"id":61982,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts\/50256\/revisions\/61982"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/media\/50257"}],"wp:attachment":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/media?parent=50256"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/categories?post=50256"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/tags?post=50256"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}