India’s Economy Grows by 6.7% in Q1 FY25, Says SBI Report
According to a recent report by the State Bank of India (SBI), India’s GDP growth for the first quarter (Q1) of the financial year 2024-25 (FY25) is 6.7%. This is higher than the average decadal growth of 6.4% for Q1.
The Ministry of Statistics and Programme Implementation released data showing that the Indian economy grew by 6.7% in real terms in the April-June quarter of FY25. This is a slowdown compared to the preceding four quarters, where growth was over 7%.
The report highlighted that the slower growth is due to weaker performance in both the agriculture and services sectors. Agriculture grew by a modest 2.0%, reflecting challenges like adverse weather conditions. The services sector grew by 7.2%, lower than previous quarters.
Despite the slower real GDP growth, nominal GDP, which includes inflation, grew by 9.7% in Q1 FY25, compared to 8.5% in Q1 FY24. Government expenditure grew by 4.1%, influenced by general elections during this quarter.
The Reserve Bank of India (RBI) had projected GDP growth for FY25 at 7.2%, based on an anticipated Q1 growth of 7.1%. With the actual Q1 growth at 6.7%, the SBI report suggests that the annual growth projection might be revised to around 7.0%, slightly below the RBI’s estimate.
Doubts Revealed
Q1 -: Q1 stands for the first quarter of the financial year. In India, the financial year starts in April and ends in March, so Q1 is from April to June.
FY25 -: FY25 means the financial year 2024-2025. It starts in April 2024 and ends in March 2025.
SBI -: SBI stands for State Bank of India. It is the largest bank in India and is owned by the government.
GDP -: GDP stands for Gross Domestic Product. It is the total value of all goods and services produced in a country in a year.
decadal growth -: Decadal growth refers to the average growth rate over the past ten years.
nominal GDP -: Nominal GDP is the total value of goods and services produced, measured in current prices, without adjusting for inflation.
government expenditure -: Government expenditure is the amount of money the government spends on various services and projects.
general elections -: General elections are when people in a country vote to choose their leaders, like the Prime Minister and Members of Parliament.
Reserve Bank of India -: The Reserve Bank of India (RBI) is the central bank of India. It manages the country’s money supply and interest rates.
