India's real GDP growth dropped to 5.4% in Q2 of 2024 (July-September), the lowest in seven quarters, from 6.7% in Q1.
This marks a significant slowdown from the 8.1% growth recorded in Q2 of 2023.
Key Sectors Affected:
Manufacturing: Growth fell sharply to 2.2% from 14.3% a year ago.
Mining: GVA contracted by 0.1%, a major decline from 11.1% growth last year.
Construction: Growth slowed to 7.7% from 13.6%
Agriculture: A strong 3.5% growth, more than double the 1.7% increase in the previous year.
The Finance Ministry expects 6.5-7% growth for the full year, but this will require a strong second-half recovery.
The first half of 2024-25 saw GDP grow at just 6%, the slowest since 2022-23, much lower than the 8.2% growth in the first half of 2023-24.
Private consumption grew by 6%, showing a recovery from the previous year's 2.6%, but slower than Q1’s 7.4%.
Factors Behind the Slowdown:
Corporate Earnings: Disappointing earnings, especially in the manufacturing sector, contributed to the slowdown.
Lower-than-expected urban demand in Q2 was noted, though this may not persist.
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