Morgan Stanley has revised the estimate of India's Gross Domestic Product (GDP) growth rate for FY 25 to 6.3%. Multinational Investment Bank and Financial Services Company had earlier estimated this at 6.7%.
Morgan Stanley had earlier estimated India's growth rate at 6.7% for FY25. Morgan Stanley has made this downgrade after the growth slowdown in the quarter ending September 2024.
GDP growth declined to 5.4% between July and September
India's GDP growth slowed year-on-year (YoY) to 5.4% in the July-September quarter of 2024, its lowest level since March 2023. GDP growth has slowed down due to poor performance of the manufacturing sector.
Growth in the third quarter of 2023 was 4.3%. Whereas in the same quarter a year ago (Q2FY24) it was 8.1%. In the previous quarter i.e., Q1FY25 it was 6.7%. India's GVA grew at 5.6% in the July-September quarter. GVA growth in the same quarter a year ago was 7.7%. Whereas in the last quarter GVA growth was 6.8%.
Sector wise growth on year on year basis (FY25 Vs FY24)
India is still the fastest growing economy among major countries
Despite slow GDP growth, India still remains the fastest growing economy among major economies. China's GDP growth in the July-September quarter this year was 4.6%. Whereas 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. In this, the foreign companies which produce within the country's borders are also included. GDP tells the health of the economy.
There are two types of GDP, real and nominal.
There are two types of GDP. In real GDP, the value of goods and services is calculated at the base year's value or stable price. At present the base year for calculating GDP is 2011-12. Whereas, nominal GDP is calculated at current price.
What is Gross Value Added (GVA)?
In simple words, GVA reveals the total output and income in an economy. It tells how many rupees worth of goods and services were produced in a given period after calculating the input cost and price of raw materials. It also shows how much production took place in a particular area, industry or sector.
From the point of view of national accounting, the figure obtained after taking out subsidies and taxes from GDP at the macro level is GVA. If you look at the production front, you will find it to be an item to balance the national accounts.
Graphics Source: NavJivanIndia | VaskarAssets
