India’s GDP growth for the July-September quarter dropped to 5.4%, the lowest since Q3FY23, as per the National Statistics Office (NSO) data released on November 29. This is a sharp decline from 8.1% in the same period last year and 6.7% in Q1FY25.
Economists had expected a moderate slowdown to 6.5%, but the economy underperformed, reaching its lowest point in nearly two years. The Reserve Bank of India (RBI) had projected 7% growth for Q2 during its Monetary Policy Committee (MPC) meeting last month, making the slowdown a surprising challenge.
The unexpected dip puts additional pressure on the central bank, which has maintained the benchmark repo rate amidst inflation concerns. The slowdown’s impact could influence future policy decisions.
In terms of sectoral performance, Gross Value Added (GVA), a crucial measure of economic activity, grew at 5.6% in Q2, down from 6.8% in the previous quarter. This points to mixed results across industries.
Agriculture saw an improvement, with output growing by 3.5% YoY, up from 2% in the previous quarter. However, manufacturing experienced a significant slowdown, with growth dropping to 2.2%, down from 7% in Q1 and 14.3% a year ago.