Synopsis
India GDP growth slows in Q2 FY25 to 5.4% amidst low consumption ,India Q2 GDP FY25 Data: In the second quarter of FY25, India’s economic growth decreased to 5.4%. This is down from 6.7% in the first quarter and 7.6% last year. Economists point to poor weather and decreased consumption as causes. Corporate profits declined while retail food inflation skyrocketed. The RBI was cautious because of inflation, but it kept its growth projection.
India GDP growth slows in Q2 FY25 to 5.4%, According to government figures released on Friday, India’s economic growth slowed to 5.4% in the second quarter of FY25, from 8.1% in the same period last year and 6.7% in the preceding quarter.
India GDP growth slows in Q2 FY25 to 5.4%, In contrast to the Reserve Bank of India’s (RBI) prediction of 7%, a Reuters poll and a survey of 17 economists published in The Economic Times predict
India Q2 GDP: Sectoral Performance
India GDP growth slows in Q2 FY25 to 5.4%, A key indicator of economic activity, real gross value added (GVA), India GDP growth slows in Q2 FY25 to 5.4%, grew by 5.6% in Q2 FY25, a slower rate than the 7.7% growth in the same period the previous year. Additionally, nominal GVA growth slowed to 8.1% from 9.3% during the same time last fiscal year.
India GDP growth slows in Q2 FY25 to 5.4%, A major contributor to GDP, private final consumption expenditure (PFCE), increased by 6.0% in Q2 compared to 2.6% in the same time the previous year. After experiencing negative or negligible growth for several quarters, Government Final Consumption Expenditure (GFCE) recovered and increased by 4.4%.
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Key sectoral highlights include:
- Mining and Manufacturing: Mining and quarrying shrank by 0.1%, India GDP growth slows in Q2 FY25 to 5.4%, while manufacturing expanded at a slow 2.2%.
Agriculture: After four quarters of below-average performance, the agriculture sector recovered with a 3.5% growth rate. - Construction: The construction industry grew by 7.7% in Q2 due to sustained domestic steel demand.
Services: India GDP growth slows in Q2 FY25 to 5.4%, The trade, lodging, and transportation sectors all had 6.0% growth, India GDP growth slows in Q2 FY25 to 5.4%, while the services sector saw a strong 7.1% growth.
Economic Challenges
- India GDP growth slows in Q2 FY25 to 5.4%, Economists have identified a number of issues affecting growth:
Inflation: In October, retail food inflation jumped to 10.87%, which reduced consumer spending power. Meanwhile, headline inflation soared to 6.2%, surpassing RBI’s comfort zone (of 2-6%). - Corporate Earnings: Concerns about investment slowdowns were raised after leading companies announced their worst quarterly performance in more than four years.
- Trends in Consumption: Despite indications of improvement in rural demand, urban private consumption, which makes up 60% of GDP, remained weak because of increasing borrowing rates and stalling wage growth.
RBI’s policy response
India GDP growth slows in Q2 FY25 to 5.4%, The RBI has lowered its forecast for GDP growth from 8.2% in the previous fiscal year to 7.2% in FY25. The benchmark repo rate was maintained at 6.50% by its Monetary Policy Committee, indicating a cautious stance in the face of ongoing inflation.
India GDP growth slows in Q2 FY25 to 5.4%, In the second half of FY25, government officials and economists anticipate a slow economic rebound, propelled by more state spending after elections and better demand in rural areas following a successful harvest. India GDP growth slows in Q2 FY25 to 5.4%, The momentum in the service sector and construction activities are both.
India GDP growth slows in Q2 FY25 to 5.4%, In order to stabilize the economic momentum, controlling inflationary pressures and boosting demand would be crucial to India’s growth trajectory in the upcoming months.
