India’s Per Capita Nominal GDP to Rise by Rs 35,000 in FY25, Despite Slower Growth: SBI Report

New Delhi: Despite a deceleration in real GDP growth and stagnant nominal GDP growth, India’s per capita nominal GDP is expected to increase by nearly Rs 35,000 in FY25, according to a report from the State Bank of India (SBI).

The report reveals that while real GDP growth has slowed significantly and nominal GDP growth remains stagnant, per capita nominal GDP is poised to rise substantially. The expected increase, compared to FY23, highlights a positive shift amid broader economic challenges.

The National Statistical Office (NSO) has pegged India’s real GDP growth at 6.4% for FY25, which underscores the deceleration in the economy. However, private consumption has emerged as a major contributor to economic growth, with a real-term increase of 7.3% in FY25. Per capita private consumption also surged by 6.3%, reflecting a strong recovery in consumer spending.

Interestingly, the report highlights that per capita Private Final Consumption Expenditure (PFCE) growth of 6.3% has outpaced the 5.3% growth in per capita GDP, suggesting that households might have been drawing on their savings to sustain higher consumption levels.

While the increase in consumption signals resilience in India’s economy, concerns about the sustainability of this trend persist, particularly if savings continue to decline. The report pointed out that this growth pattern could be financed by a net reduction in savings, raising questions about its long-term stability.

The SBI report offers valuable insights into India’s evolving economic landscape, underlining the importance of key indicators like per capita income and consumption, which are central to understanding the trajectory of the country’s growth.