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According to MoF Report India's Economy Expected to Grow at 6.5% in FY25.

Banking & Finance | Dated: 31 Dec 2024

In December 2024, the Department of Economic Affairs (DEA), under the Ministry of Finance (MoF), released its Monthly Economic Review for November 2024. According to the report, the Indian economy is expected to grow at 6.5% in Financial Year 2024-25 (FY25). This is a slight revision from the previous projection range of 6.5% to 7% due to challenges arising from global uncertainties and external factors.

🎯 Key Highlights:

  • - This revised projection comes after India's Gross Domestic Product (GDP) growth slowed to 5.4% in the 2nd Quarter (Q2: July to September) of FY25.
  • - The report attributes part of this slowdown to the Reserve Bank of India (RBI)’s tight monetary policy, especially during the 1st Half (H1: April to September) of FY25.
  • - Despite the slowdown, the report suggests a positive outlook for the 3rd Quarter (Q3: October to December) of FY25, with urban demand picking up in the first two months of the quarter.

💡 Other Important Facts:

  • (i) The report noted that several factors are supporting the sowing of rabi crops, including the increase in Minimum Support Price (MSP) for these crops, high reservoir levels, and the availability of sufficient fertilizers.
  • (ii) The report showed that rural demand remains strong, with sales of two-wheelers, three-wheelers, and domestic tractors increasing by 23.2% and 9.8% respectively.
  • (iii) Additionally, urban demand is also growing, with passenger vehicle sales showing a Year-on-Year (Y-o-Y) growth of 13.4% from October to November 2024. Domestic passenger traffic also registered strong growth.

📚 Test Your Knowledge:

According to the Ministry of Finance (MoF) report, India's economy is expected to grow at what rate in FY25?

Correct Answer: 6.5%

🚀 Quick Recap:

About Ministry of Finance (MoF)

  • Minister: Nirmala Sitharaman
  • Headquarters : New Delhi