India's Q2 GDP Growth Drops to 5.4%, Multi-Quarter Low
India’s GDP growth slumps to 5.4% in Q2 FY24-25, driven by weak manufacturing, mining contraction, and slow government spending, as per NSO data
sheetal
India’s real GDP growth fell to a multi-quarter low of 5.4% during July-September 2024 (Q2 of FY 2024-25), according to the National Statistical Office (NSO). This is a sharp decline from 6.7% in Q1 (April-June) and 8.1% in the same quarter last year.
Key Reasons for the Slowdown
The NSO attributed the decline to:
- Sluggish Manufacturing Growth:
- Grew by only 2.2% in Q2, compared to 7% in Q1 and 14.3% last year.
- Mining and Quarrying Contraction:
- Recorded a -0.1% contraction in Q2, after growing 7.2% in Q1 and 11.1% a year ago.
- Weak Government Expenditure and Private Consumption:
- Continued slow spending weighed heavily on economic momentum.
Sector-Wise Performance
- Agriculture:
- Recorded 3.5% growth, improving from 2% in Q1 and 1.7% last year.
- Construction:
- Slowed to 7.7% growth in Q2, from 10.5% in Q1 and 13.6% a year ago.
- Services:
- Grew by 7.1%, marginally below Q1’s 7.2%, but above last year’s 6%.
Government Statement on Growth
Despite weak performances in manufacturing and mining, the Ministry of Statistics and Programme Implementation highlighted:
“Real GVA in H1 (April-September) recorded a 6.2% growth rate, reflecting resilience in some sectors despite challenges.”
Economic Implications
The sharp dip in growth raises concerns over the country’s economic trajectory. Persistent slowdowns in core sectors and weak consumption demand could impact future growth forecasts, necessitating targeted policy interventions.
Key Highlights:
- Manufacturing Growth Falls to 2.2%.
- Mining Contracts by -0.1%.
- Agriculture and Services Show Stability with moderate growth.
This latest data calls for renewed focus on investment-driven growth and boosting domestic demand to maintain economic stability.
