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