India's economic growth slowed down in the second quarter (Q2) of the financial year 2024-25. According to government data, the country's GDP growth for the September quarter was recorded at 5.4%, a significant drop compared to 8.1% in the same period last year. Even in the first quarter of the current fiscal year, GDP growth stood at a relatively higher 6.7%. Economists attribute this slowdown to weak consumption and adverse weather conditions in key sectors, such as floods, which negatively impacted economic activity.
Growth Falls Short of Expert Expectations
The GDP growth for Q2 was considerably lower than experts had anticipated. Many economists had already predicted a decline in growth due to reduced consumption, but the actual figure was even lower than their projections. Most experts had expected GDP growth to range between 6% and 6.5%. The Reserve Bank of India (RBI) had forecasted a growth rate of 7%. A Reuters survey had also predicted a 6.5% growth for the quarter.
Decline in Gross Value Added (GVA)
Gross Value Added (GVA), a key measure of economic activity, also showed a decline. In Q2 of FY 2024-25, real GVA grew by 5.6%, compared to 7.7% in the same period last year. This indicates that overall economic activities remained sluggish on a year-on-year basis. The nominal GVA growth also dropped, falling to 8.1% from 9.3% in the previous year.
The data highlights the challenges faced by India’s economy during this period, marked by weaker demand, natural calamities, and a slowdown in several important sectors.
