India's Growth Forecast Cut to Lowest Level Post-Pandemic

Investing.com -- The Indian government has revised its economic growth forecast for the fiscal year to the lowest level since the pandemic due to a slowdown in consumer spending and public investment.

The Statistics Ministry announced on Tuesday that Gross Domestic Product (GDP) is expected to grow by 6.4% in the year up to March, down from the 8.2% growth seen in the previous fiscal year. This figure is in line with the median estimate from a Bloomberg survey of economists, but slightly lower than the government's previous forecast of 6.5% made last month.

This revision underscores growing concerns about the slowdown of India’s once soaring growth. It poses challenges for Prime Minister Narendra Modi's ambitious plans to transform India into a developed economy and to create jobs for millions of young people entering the workforce each year.

Throughout this fiscal year, consumers have reduced their spending due to falling wages and rising inflation, impacting profits for some of the country’s major retailers. There has been a significant decline in household and business spending, which accounts for about 60% of India’s GDP. Additionally, the government was unable to fulfill its budgeted expenditures this year partly due to weeks-long elections, further hampering growth.