GDP Growth- Morgan Stanley has revised its estimate of India’s Gross Domestic Product (GDP) growth rate for FY25 to 6.3%. The multinational investment bank and financial services company had earlier estimated this estimate to be 6.7%.
Morgan Stanley had earlier estimated India’s growth rate for FY25 at 6.7%. Morgan Stanley has done this downgrade after the growth slowdown in the quarter ended September 2024.
GDP growth declined to 5.4% between July and September
India’s GDP growth slowed to 5.4% year-on-year (YoY) in the July-September quarter of 2024, its lowest level since March 2023. GDP growth has slowed due to the poor performance of the manufacturing sector.
Growth was 4.3% in the third quarter of 2023. At the same time, it was 8.1% in the same quarter a year ago (Q2FY24). In the previous quarter i.e. Q1FY25, it was 6.7%. India’s GVA grew at the rate of 5.6% in the July-September quarter. Same as a year ago
Sector wise GDP growth on year-on-year basis (FY25 Vs FY24)
- Mining Growth: -0.1% Vs 11.1%
- Manufacturing Growth: 2.2% Vs 14.3%
- Electricity Growth: 3.3% Vs 10.5%
- Construction Growth: 7.7% Vs 13.6%
- Agriculture Growth: 3.5% Vs 1.7%
- Trade, Hotel Growth: 6% Vs 4.5%
- Finance and Real Estate Growth: 6.7% Vs 6.2%
- Public Admin and Service Growth: 9.2% Vs 7.7%
India still the fastest growing economy among major countries
Despite slow GDP growth, India remains the fastest-growing economy among major economies. China’s GDP growth was 4.6% in the July-September quarter this year. Japan’s GDP has grown at the rate of 0.9%.
GDP measures the value of goods and services
GDP i.e. Gross Domestic Product measures the total value of goods and services produced in the country within a period. It also includes foreign companies which produce within the country’s borders. GDP tells the health of the economy.
GDP is of two types, real and nominal
GDP is of two types. In real GDP, the value of goods and services is calculated on the base year’s value or stable price. Currently, the base year for calculating GDP is 2011-12. Whereas, nominal GDP is calculated on the current price.
What is Gross Value Added i.e. GVA?
In simple words, GVA shows the total output and income in an economy. It tells how much goods and services were produced in a given period after deducting the input cost and the price of raw materials. It also tells how much production took place in a particular area, industry, or sector.
From the perspective of National Accounting, the figure obtained after deducting subsidy and tax from GDP at the macro level is GVA. If you look at it from the production front, you will find it to be an item that balances the National Accounts.
