ECONOMY DELIVERS A SHOCKER, Q2 GROWTH SLOWS TO 5.4%

Slower-than-expected growth raises concerns among experts

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The Indian economy grew by 5.4 per cent in real terms in the July-September quarter of the current financial year 2024-25, Ministry of Statistics and Programme Implementation's official data showed on Friday.

The quarterly growth was quite lower than RBI's forecast of 7 per cent. This slower-than-expected growth has raised concerns among economists, who are now adjusting their projections for the rest of the year.

"Real GDP growth at a shocker 5.4% YoY in 2QFY25, much lower than our forecast of 6.2%, market consensus of 6.5% and RBI forecasts of 6.7%. Are we staring at stagflation?" wondered Nikhil Gupta, Chief Economist, MOFSL Group.

Upasna Bhardwaj, chief economist at Kotak Mahindra Bank, noted that the sharp dip in GDP growth reflects the disappointing corporate earnings data, particularly in the manufacturing sector, which appears to have faced the brunt of the slowdown.

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.