Potential GDP: Determinants and Hindrances

Potential GDP represents the maximum sustainable output an economy can produce when all its resources – labour, capital, and technology – are fully and efficiently employed without accelerating inflation. It is a crucial benchmark for assessing an economy's long-term growth capacity and identifying the gap between actual and potential output.

Recent Developments

  • India's real GDP growth for FY 2024-25 is estimated at 6.4%, as per the first advance estimates, remaining close to its decadal average.
    • Nominal GDP growth is projected at 9.7% for FY 2024-25.
  • Retail inflation has moderated to 4.9% (April-December 2024) from 5.4% in 2023-24, staying within the ....
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Indian Economy