GDP progress slumps to 7-quarter low of 5.4%

NEW DELHI: The nation’s financial progress in July-Sept quarter of the present fiscal 12 months slowed to a seven-quarter low, dragged down by slowing manufacturing and a contraction in mining. The companies sector remained secure and the farm section staged a rebound.
Information launched by the Nationwide Statistics Workplace confirmed GDP grew by 5.4% within the three months to Sept, slower than the 6.7% within the April-June interval and under the 8.1% recorded within the second quarter of 2023-24. It was additionally under the RBI projection of seven% for the three-month interval ending Sept. The central financial institution has retained its forecast of seven.2% progress for 2024-25. Govt expects the financial system to develop within the 6.5%-7% vary. TNN

Development slowdown sharper than anticipated, say specialists
The slowdown within the second quarter was sharper than anticipated and pointed to weak spot in consumption and funding. The slowdown, which has been anticipated, has been linked to a number of components, together with weather-related occasions comparable to extra rainfall that harm electrical energy, coal and cement sectors, muted company earnings and the impression of cussed inflation on general demand. Chief financial adviser V Anantha Nageswaran mentioned, “Actual GDP progress print of 5.4% is on the decrease aspect and it’s disappointing however there are some brilliant spots.”
The manufacturing sector slowed sharply within the second quarter to 2.2% in comparison with an growth of 14.3% within the 12 months earlier three-month interval. The mining sector contracted 0.1% in comparison with a progress of 11.1% within the second quarter of final 12 months. The commercial sector slowed to a six-quarter low of three.6%. The essential companies sector held regular and sustained its momentum, rising 7.1% within the three months to Sept in comparison with 7.2% within the earlier quarter. The farm and allied sectors, which had remained sluggish within the earlier quarters, bounced again rising by 3.5% in comparison with 2% within the earlier quarter and 1.7% within the second quarter of final 12 months.
“Whereas the GDP progress was anticipated to average as indicated by a few of the excessive frequency macro-economic indicators and weaker company efficiency, the quantum of deceleration is way sharper than anticipated. Decrease progress is especially due to poor industrial sector efficiency, particularly mining, manufacturing and electrical energy segments,” mentioned Rajani Sinha, chief economist at rankings company CareEdge.
“There was a pointy moderation in investments. The govt.’s capex that had been supporting progress up to now noticed a moderation, with the Centre and consolidated state capex falling by 15% and 11%, respectively, within the first half. Nevertheless, the optimistic side is that consumption progress has remained wholesome at round 6% in Q2,” mentioned Sinha.