India's GDP Growth Signals Economic Challenges in FY25

India's GDP growth is projected to fall below 6.5% in FY25, with Q2 growth slowing to 5.4%, according to SBI. Manufacturing-led slowdown impacted economic performance, while services and agriculture showed resilience. The report highlights a temporary pause in growth, with industry sector challenges persisting.

India's GDP growth trajectory appears to be facing significant challenges, as the latest State Bank of India (SBI) report suggests a downturn in economic performance. With GDP growth slowing to 5.4% in the second quarter of FY25, the financial year's growth is expected to drop below 6.5%.

The manufacturing sector has been a notable drag on the economy, with the industry sector's growth plummeting to a six-quarter low of 3.6% in Q2. This decline underscores the sluggishness in industrial activities, contributing heavily to the dampening of overall GDP numbers despite some resilience in other sectors.

Further analysis points out a significant reduction in incremental growth within the sector, with Q2 witnessing a mere Rs 42,515 crore growth compared to Rs 1.4 lakh crore a year prior. The services and agriculture sectors, albeit resilient, have not compensated for the gap, indicating a temporary pause in India's growth momentum.

(With inputs from agencies.)