India's Economy Grows at 5.4% in Q2, Falling Short of RBI's Forecast
India's economy expanded by 5.4% in Q2 of 2024-25, below the RBI's 7% forecast. Private consumption is set to revive growth, as predicted by the RBI. Though Q2 growth lagged, the medium-term outlook remains positive, with projected growth rates earning positive forecasts from global agencies.
- Country:
- India
The Indian economy registered a 5.4% growth rate for the July-September quarter of the 2024-25 financial year, according to figures released by the Ministry of Statistics and Programme Implementation on Friday. This rate falls significantly short of the Reserve Bank of India's (RBI) earlier forecast of 7% for the quarter.
Compared to last year's 8.1% growth in the same quarter, this year's figures demonstrate a noticeable slowdown, despite a 6.7% increase in the April-June quarter—also below the RBI's 7.1% prediction. Nonetheless, the RBI, along with international institutions like the IMF, remain confident, projecting overall GDP growth for the year between 7% and 7.2%.
The RBI's projections for the coming quarters remain optimistic, with revised anticipations of 7.4% growth for both Q3 and Q4, attributing the current sluggish momentum to be a temporary setback. With consumer spending rejuvenating the economy, particularly during the festival season of October-December, the RBI maintains a positive medium-term economic outlook.
(With inputs from agencies.)