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BIG STORY DECEMBER 06, 2024 | The Indian Eye 4

ECONOMIC GROWTH

TEMPORARY

SLUMP?

The Indian economy grew by 5.4 per cent in the July-September quarter of

the current financial year, causing concern in the corporate and business sectors.
What is slowing the Indian economy and what is the way out?

OUR BUREAU

Mumbai/New Delhi
n a warning sign for the country’s
economy, the Indian economy
Igrew by 5.4 per cent in real terms
in the July-September quarter of the
current financial year 2024-25, Min-
istry of Statistics and Programme Im-
plementation’s official data showed
on Friday. The quarterly growth was
quite lower than RBI’s forecast of 7
per cent.
Real GDP in Q2 of 2024-25 is
estimated at Rs 44.10 lakh crore,
against Rs 41.86 lakh crore in Q2 of
2023-24, showing a moderate growth
rate of 5.4 per cent. Last year same
quarter, India grew 8.1 per cent. In-
dian economy grew 6.7 per cent in the
April-June quarter, lower than RBI’s
7.1 per cent forecast.
The RBI has pegged India’s
2024-25 GDP growth at 7.2 per cent.
IMF and World have pegged it at 7.0
per cent. Many global rating agencies Private consumption, which is expected to drive domestic demand, is showing signs of recovery, bolstered by festive season spending (Agency file photo)
and multilateral organizations have
also revised their growth forecasts for day retained India’s GDP forecast for um-term outlook remains bullish. reflects the disappointing corporate
India upwards. the current financial year 2024-25 at India’s GDP grew by an impres- earnings data, particularly in the man-
In its latest monetary policy re- 6.8 per cent while cutting econom- sive 8.2 per cent during the financial ufacturing sector, which appears to
view meeting in October, RBI pegged ic growth forecasts for the next two year 2023-24, continuing to be the have faced the brunt of the slowdown.
Q2 growth forecast at 7.0 per cent; years. The Reserve Bank of India last fastest-growing major economy. The She said, “The sharply low-
Q3 at 7.4 per cent; and Q4 at 7.4 per week said that the weakness witnessed economy grew by 7.2 per cent in 2022- er-than-expected GDP figures reflect
cent. Real GDP growth for Q1 of next in the Indian economy, particularly in 23 and 8.7 per cent in 2021-22. the highly disappointing corporate
financial year 2025-26 is projected at the recent quarter, is behind us. But now India’s GDP growth earnings data. The manufacturing
7.3 per cent. The slack in speed in the Indi- has disappointed expectations, with sector appears to have taken the max-
The Economic Survey tabled in an economy observed in the second the economy growing by just 5.4 per imum beating. The high-frequency
Parliament earlier this year “conser- quarter of 2024-25 (July-September) cent in the July-September quarter of data suggests that festive linked reviv-
vatively” projected India’s real GDP is behind us as private consumption is FY2024-25. This slower-than-expect- al in activity may provide a marginally
growth at 6.5-7 per cent for 2024-25, back to being the driver of domestic ed growth has raised concerns among better 2H growth figure, but overall
acknowledging that market expecta- demand with festival spending light- economists, who are now adjusting GDP growth for FY25 is going to be
tions are higher. Real GDP growth is ing up real activity in October-De- their projections for the rest of the year. around 100bps lower than RBI’s esti-
the reported economic growth adjust- cember, RBI had said in its latest Upasna Bhardwaj, chief econo- mate of 7.2 per cent.”
ed for inflation. monthly bulletin. mist at Kotak Mahindra Bank, not- She added, “Despite the sharp
S&P Global Ratings this Mon- The RBI asserted that the medi- ed that the sharp dip in GDP growth Continued on next page... >>

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