Indian Economy Forecast Brightens Despite Slow Q2 Growth

Economic Affairs Secretary Ajay Seth expressed optimism about improved GDP growth in the second half of the fiscal, despite a Q2 slowdown to 5.4%, driven by underperformance in manufacturing and mining. The Economic Survey projects a growth of 6.5-7% for 2024-25, following a previous 8.2% peak.

In a statement made on Monday, Economic Affairs Secretary Ajay Seth highlighted that India's GDP growth of 5.4% in the second quarter is below potential, yet he remains optimistic about a stronger performance in the latter half of the fiscal year.

Seth emphasized that several October high-frequency indicators support the expectation of improved growth in the upcoming quarters. Historical data revisions often bring upward adjustments to these preliminary GDP estimates.

The latest figures indicate a slowdown influenced by weak performance in the manufacturing and mining sectors. However, agriculture showed an encouraging uptick from 1.7% to 3.5% GVA growth, offering some positive momentum.

(With inputs from agencies.)