India’s GDP Slows to Seven-Quarter Low of 5.4% in Q2 2024-25: NSO

The National Statistical Office (NSO) has released its latest GDP forecast, highlighting significant economic trends and challenges for the second quarter (Q2) of FY 2024-25. Below is a detailed analysis of the report.

India’s GDP Growth Trends: A Multi-Quarter Low

Quarterly Performance:

  • Real GDP growth dropped to 5.4% in Q2 FY 2024-25, compared to 6.7% in Q1.
  • Gross Value Added (GVA) growth also declined to 5.8% from 6.8% in Q1.
  • This marks the slowest GDP growth in seven quarters, last seen at 4.3% in Q3 FY 2022-23.

Year-on-Year Comparison:

  • Real GDP growth stood at 8.1% in Q2 FY 2023-24, while GVA growth was 7.7% in the same period.

Sectoral Performance

Agriculture and Allied Activities:

  • GVA growth in agriculture rebounded to 3.5% in Q2 from 1.7% last year.
  • The first half (H1) of FY 2024-25 saw slower growth at 2.7%, compared to 2.8% in H1 FY 2023-24.

Mining and Quarrying:

  • Recorded a contraction of -0.1% in Q2, a stark contrast to 11.1% growth in Q2 last year.

Manufacturing:

  • Growth dropped to a mere 2.2% from 14.3% in Q2 FY 2023-24.

Construction:

  • GVA grew by 7.7%, significantly lower than the 13.6% seen a year ago.

Services Sector:

Public Administration, Defence, and Other Services:

  • GVA rose by 9.2% from 7.7% last year.

Trade, Hotels, Transport, and Communication:

  • Improved to 6.6%, up from 4.5% last year.

Financial and Professional Services:

  • Marginal growth improvement to 6.7% from 6.2% last year.

Utilities (Electricity, Gas, and Water Supply):

  • GVA growth slowed to 3.3%, compared to 10.5% in Q2 FY 2023-24.

Consumption and Investment

Private Final Consumption Expenditure (PFCE):

  • Consumption spending grew by 6% in Q2, up from 2.6% a year ago.
  • However, it slowed from the 7.4% growth recorded in Q1.

Gross Fixed Capital Formation (GFCF):

  • Investment growth slowed to 5.4%, compared to 7.5% in Q1.

Half-Yearly (H1) Analysis

Real GDP Growth:

  • Recorded at 6% for H1 FY 2024-25, marking the slowest six-month growth since H2 FY 2022-23.

Real GVA Growth:

  • Estimated at 6.2%, reversing the trend where GDP growth outpaced GVA growth in FY 2023-24.

Government and RBI Projections

Reserve Bank of India (RBI):

  • Projected Q2 GDP growth at 6.8%, while its overall FY forecast remains at 7.2%.

Finance Ministry:

  • Estimates GDP growth to range between 6.5% and 7% for FY 2024-25.

NSO Data:

  • Indicates a need for a sharp economic rebound in H2 FY 2024-25 to meet these projections.

Summary Table: Key Insights on India’s GDP Growth

Aspect Q2 FY 2024-25 Q2 FY 2023-24 Change
GDP Growth 5.4% 8.1% Decline
GVA Growth 5.8% 7.7% Decline
Agriculture GVA Growth 3.5% 1.7% Improved
Mining and Quarrying GVA Growth -0.1% 11.1% Sharp Decline
Manufacturing Growth 2.2% 14.3% Sharp Decline
Construction Growth 7.7% 13.6% Decline
Public Admin., Defence GVA Growth 9.2% 7.7% Improved
Private Consumption (PFCE) 6.0% 2.6% Improved
Gross Fixed Capital Formation (GFCF) 5.4% 7.5% Decline

 

Sumit Arora

As a team lead and current affairs writer at Adda247, I am responsible for researching and producing engaging, informative content designed to assist candidates in preparing for national and state-level competitive government exams. I specialize in crafting insightful articles that keep aspirants updated on the latest trends and developments in current affairs. With a strong emphasis on educational excellence, my goal is to equip readers with the knowledge and confidence needed to excel in their exams. Through well-researched and thoughtfully written content, I strive to guide and support candidates on their journey to success.

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