Economic growth slows to 5.4 pc in July-September quarter of FY25: Govt data
New Delhi: India’s economy slowed to a seven-quarter low of 5.4 per cent in July-September, growing lower than the consensus estimate of 6.5 per cent. However, the country’s economy or gross domestic product (GDP)growth was 6.7 per cent in the April-June quarter and 8.1 per cent in the year-ago period. "Despite showing the slowest growth in seven quarters, India still remains the fastest major economy in the world," the government said on Friday.
With this fall of growth numbers, the government, however, attributed the reasons for this disappointing numbers, saying that a “sluggish growth” in manufacturing and mining, along with continued slow pace of government expenditure and weak private consumption weighed on the economic growth. The weaker-than-expected GDP growth raises concerns about the sustainability of economic recovery, particularly as key sectors like manufacturing and mining face challenges.
Commenting on the GDP growth print on a lower side of 5.4 percent, chief economic advisor (CEA) V Anantha Nageswaran said that it is disappointing, but it’s not an alarming situation. "The global environment has been challenging which has impacted domestic manufacturing, Unexpected under-recovery in China has impacted domestic prices and manufacturing. The geo-political uncertainties have also flared due to US presidential elections. There has been a very big spike in trade uncertainties," Mr Nageswaran said.
As per the data released by the National Statistical Office (NSO), the real GDP has been estimated to grow by 5.4 per cent in Q2 of FY 2024-25 over the growth rate of 8.1 per cent in Q2 of FY 2023-24. "Despite sluggish growth observed in manufacturing (2.2 per cent) and mining & quarrying (-0.1 per cent) sectors in Q2 of FY 2024-25, the real GVA in H1 (April-September) has recorded a growth rate of 6.2 per cent," the NSO data said.
"Real GVA has grown by 5.6 per cent in Q2 of FY 2024-25 over the growth rate of 7.7 per cent in Q2 of the previous financial year. The nominal GVA has witnessed a growth rate of 8.1 per cent in Q2 of FY 2024-25 over the growth rate of 9.3 per cent in Q2 of FY 2023-24. The agriculture and allied sector has bounced back by registering a growth rate of 3.5 per cent in Q2 of FY 2024-25 after sub-optimal growth rates ranging from 0.4-2.0 per cent, observed during previous four quarters," the data said.
Hoping for a positive growth in some key sectors like agriculture, Mr Nageswaran further said that outlook for the agriculture sector is favourable. "We expect pick up in the agri sector to continue in H2. Steel consumption has gone up but not production. Some of the slowdown factors may not continue at the same pace in the coming quarters. Similarly, construction is also a bright spot; full-year growth has been a high single digit. The major reason is a slowdown in manufacturing and the impact of dumping in India," the CEA said.
