NEW DELHI: The nation’s financial growth in July-Sept quarter of the present fiscal 12 months slowed to a seven-quarter low, dragged down by slowing manufacturing and a contraction in mining. The providers sector remained steady and the farm phase staged a rebound.
Data launched by the National Statistics Office confirmed GDP grew by 5.4% within the three months to Sept, slower than the 6.7% within the April-June interval and under the 8.1% recorded within the second quarter of 2023-24. It was additionally under the RBI projection of 7% for the three-month interval ending Sept. The central financial institution has retained its forecast of 7.2% growth for 2024-25. Govt expects the economic system to develop within the 6.5%-7% vary. TNN
Growth slowdown sharper than anticipated, say consultants
The slowdown within the second quarter was sharper than anticipated and pointed to weak point in consumption and funding. The slowdown, which has been anticipated, has been linked to a number of components, together with weather-related occasions similar to extra rainfall that damage electrical energy, coal and cement sectors, muted company earnings and the influence of cussed inflation on total demand. Chief financial adviser V Anantha Nageswaran mentioned, “Real GDP growth print of 5.4% is on the lower side and it is disappointing but there are some bright spots.”
The manufacturing sector slowed sharply within the second quarter to 2.2% in contrast to an enlargement of 14.3% within the 12 months earlier three-month interval. The mining sector contracted 0.1% in contrast to a growth of 11.1% within the second quarter of final 12 months. The industrial sector slowed to a six-quarter low of 3.6%. The essential providers sector held regular and sustained its momentum, rising 7.1% within the three months to Sept in contrast to 7.2% within the earlier quarter. The farm and allied sectors, which had remained sluggish within the earlier quarters, bounced again rising by 3.5% in contrast to 2% within the earlier quarter and 1.7% within the second quarter of final 12 months.
“While the GDP growth was expected to moderate as indicated by some of the high frequency macro-economic indicators and weaker corporate performance, the quantum of deceleration is much sharper than expected. Lower growth is mainly because of poor industrial sector performance, specifically mining, manufacturing and electricity segments,” mentioned Rajani Sinha, chief economist at rankings company CareEdge.
“There has been a sharp moderation in investments. The govt’s capex that had been supporting growth so far saw a moderation, with the Centre and consolidated state capex falling by 15% and 11%, respectively, in the first half. However, the positive aspect is that consumption growth has remained healthy at around 6% in Q2,” mentioned Sinha.
