Global rating agency Moody's has now raised India's gross domestic i.e. GDP growth forecast for the calendar year 2024 to 7.1%. Earlier, Moody's raised India's GDP growth estimate to 6.8% from 6.1%.
While Moody's has forecast India's GDP growth for 2025 at only 6.5%. In addition, the agency has projected India's GDP growth at 6.6% for 2026.
In June, Moody's said India's economy will slow to 6.2% in 2026. The firm also predicts good results for inflation. Not only this, the agency also lowered India's inflation estimate to 4.7% from 5%.
India inflation forecast at 4.5% in 2025
India's inflation has remained below 4% in July and August. The agency has projected India's inflation at 4.5% and 4.1% in 2025 and 2026. RBI expects inflation to ease to 4.5% in FY2025.
According to media reports, the central bank is unlikely to change rates in the next meeting. The first cut of 25 basis points is likely to happen in December.
At the same time, the Federal Reserve Bank of America recently cut the policy rate by 50 basis points to allay fears of a recession.
What is GDP?
GDP is one of the most common indicators used to track the health of an economy. GDP represents the value of all goods and services produced within a country in a specific period of time. It also includes foreign companies manufacturing within the country's borders.
There are two types of GDP
There are two types of GDP. Real GDP and Nominal GDP. In real GDP, the value of goods and services is calculated at a base year's value or constant price. Currently the base year for calculating GDP is 2011-12. When nominal GDP is calculated at current price.
How is GDP calculated?
The formula is used to calculate GDP. GDP=C+G+I+NX, where C stands for Private Consumption, G for Government Expenditure, I for Investment and NX for Net Exports.
What is GVA?
In simple terms, GVA represents the total output and income in an economy. It states how many rupees worth of goods and services were produced in a given period after accounting for input costs and cost of raw materials. It also shows how much production has been produced in a particular sector, industry or sector.
If viewed from a national accounting perspective, GVA is the figure obtained after subtracting subsidies and taxes from GDP at the macro level. If you look at the production front, you will find that it is an item to balance the national accounts.
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