India’s Chief Economic Advisor V Ananth Nageswaran said on Friday the economy is poised to surpass the $4 trillion GDP milestone in the current financial year, with stronger nominal GDP growth expected in the second half as inflation base effects fade.Speaking on the outlook for nominal GDP, Nageswaran explained that while low inflation driven by weak demand could be a concern, the current disinflationary trend is largely supply-led and not indicative of sluggish economic activity.
“Low inflation or deflation arising out of bountiful production or excess supply is not a worry. This is not a situation where low inflation reflects weak aggregate demand,” he said.
He added that nominal GDP growth should pick up in Q3 and Q4 as the statistical base effect on inflation eases.The CEA stressed that India’s macro fundamentals remain robust, citing steady consumption, buoyant public and private sector investment, and exporters’ ability to withstand tariff shocks and expand into new markets.On the RupeeCommenting on the exchange rate, Nageswaran said the rupee’s recent depreciation reflects dollar demand pressures rather than any fundamental weakness.“As we import more than we export, capital flows need to be higher. They are improving on the FDI front compared to last year but not substantially enough. Along with higher gold prices, this means the currency reflects the demand for dollars,” he said, adding the INR’s movement does not signal any disquiet or concern over macro stability which is sound.$4 Trillion GDP MilestoneNageswaran confirmed that India’s GDP stood at $3.93 trillion at the end of March 2025, and the $4 trillion threshold will be crossed when the Ministry of Statistics releases its first advance estimates in January 2026.“Yes, that will be the case,” he said in response to CNBC-TV18’s query.(Edited by : Poonam Behura)
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