Per capita nominal GDP in FY25 to grow by ₹35,000 more than FY23: economists

Despite a slowdown in real GDP growth, India’s per capita nominal GDP is projected to rise significantly in FY25, increasing by at least ₹35,000 compared to FY23, according to economists.

The first advance estimate (AE) of GDP for FY25, released by the National Statistical Office (NSO), forecasts GDP growth at 6.4 per cent. The gross value added (GVA) growth is also pegged at 6.4 per cent. Meanwhile, nominal GDP growth is estimated to remain steady, growing at 9.7 per cent in FY25, slightly above the 9.6 per cent growth recorded in FY24.

“Historically, the difference between the RBI’s estimate and the NSO’s estimate has always been in the range of 20-30 basis points, and the 6.4 per cent estimate for FY25 is in line with expectations. However, we believe GDP growth for FY25 could be around 6.3 per cent, with a downward bias,” said Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser at the State Bank of India.

Dr. Ghosh further noted, “Buoyed by robust policy measures and overlapping phy-gital public infrastructure creation, coupled with the formalisation of finance, Agriculture and Allied Activities are likely to grow by 3.8 per cent in FY25, compared to 1.4 per cent in the previous year.”

The service sector, on the other hand, is projected to grow at 7.2 per cent in FY25, slightly lower than the 7.6 per cent growth recorded in FY24.

Among the key contributors, government consumption is estimated to grow by 8.5 per cent in nominal terms (4.1 per cent in real terms), while exports are also expected to post positive growth of 8 per cent (5.9 per cent in real terms).

Nikhil Gupta, Chief Economist at MOFSL Group, highlighted the NSO’s projections, which suggest a revival in consumption and a moderation in investments during the second half of FY25.

“Private consumption is expected to grow by 7.8 per cent year-on-year in the second half of FY25 (compared to 6.7 per cent and 4 per cent growth in the first half of FY25 and FY24, respectively). Government consumption is estimated to grow by 6.1 per cent in the second half (versus 2 per cent and 2.5 per cent in prior periods), while total investment is projected to rise by 5.8 per cent, down from 6.5 per cent and 9.4 per cent earlier,” Gupta said.

Rajani Sinha, Chief Economist at CareEdge Ratings, added that consumption growth is expected to accelerate in the second half of FY25 compared to the first half.

“Healthy agricultural growth and the likely moderation in food inflation should help boost consumption in the coming months. Sustained consumption growth will also drive private investment,” Sinha remarked.