India Q2 GDP: Economic system grows 5.4% in July-Sept, a 7-quarter low

Authorities information launched on Friday (November 29) confirmed that India’s financial development slowed down to five.4 per cent within the second quarter of the continued fiscal (Q2 2024) July-September 2024 in comparison with the 8.1 per cent determine reported for a similar interval in 2023.

That is the bottom GDP development fee previously 7 quarters.

The quantity was properly under consultants’ expectations. A ballot of 11 economists performed by Moneycontrol, and a ballot by CNBC-TV18, had each pegged median development at 6.5 per cent.

Why did financial development decelerate?

The slowdown has been attributed to lowered authorities spending– owing to common elections– in addition to weak consumption.

Economists have particularly identified personal consumption, which accounts for about 60 per cent of India’s GDP, has been affected by a slowdown in city spending.

City spending in flip has been affected by larger meals inflation, borrowing prices and sluggish actual wage development, regardless of indicators of restoration in rural demand.

Moreover, local weather change-induced antagonistic impression on a number of key industries are additionally being held answerable for the low development.

Although it’s the slowest development in seven quarters, India nonetheless stays the quickest main economic system on the planet.

Blended sectoral tendencies

Sectoral efficiency confirmed combined tendencies. Agriculture, one of the vital distinguished sectors within the Indian economic system, improved to three.5 per cent in comparison with 1.7 per cent year-on-year.

Mining contracted by 0.1 per cent in comparison with stellar development of 11.1 per cent YoY. Manufacturing development additionally slowed considerably to 2.2 per cent from a strong 14.3 per cent YoY.

The slowdown has already been mirrored in Q2 company earnings.

Other than Q2 GDP, the financial development for the primary half of the continued fiscal yr additionally slowed down. The expansion slowed to 6 per cent within the April-September interval of 2024.

For a similar interval within the 2023 fiscal, the financial development quantity stood at 8.2 per cent.

With inputs from businesses