New Delhi [India], March 1 : Future growth trajectory of the country will be led by revival in the private investment, according to a report by the State Bank of India (SBI).
The report added that the decline in gross capital formation (GCF) in FY24 is a matter of concern, and a revival in investment, particularly by private corporations, will be crucial for India's future economic growth.
SBI said "we believe, revival in private investment (particularly of private corporations) will be a major key to the future growth trajectory".
The report highlighted that gross capital formationwhich represents overall investment in the economydropped from 32.6 per cent of GDP in FY23 to 31.4 per cent in FY24.
The major reason for this decline is the slowdown in private sector investment, which had reached a 10-year high of 25.8 per cent of GDP in FY23 but fell to 24.0 per cent in FY24.
Despite this, public sector investment increased and reached an all-time high of 8.0 per cent of GDP in FY24, the highest since FY12. Both public and government investment showed growth compared to the previous year, which helped support overall investment levels.
It added "both public and Government investment exhibited growth in FY24 as compared to FY23. Even, public sector investment reached to an all-time high level"
For FY25, the report estimates that both savings and investment in the economy will improve, reaching 31 per cent and 32 per cent of GDP, respectively. This positive outlook is supported by expectations of 6.5 per cent GDP growth for FY25.
Based on this FY25 GDP growth estimate, the report derives a Q4 GDP growth rate of 7.6 per cent. However, it also mentions that there could be a revision in the quarterly GDP figures in May 2025.
The report further notes that India's real GDP growth rate for FY24 is estimated at 9.2 per cent, making it the highest in the past 12 years, except for FY22, when GDP grew 9.7 per cent, the highest since India's independence.
The report highlighted the importance of reviving private investment, especially in the corporate sector, to sustain high economic growth in the coming years.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor