The National Statistics Office on Friday announced that the Q2 GDP was 5.4%, down from 6.7% in the April-June quarter. As per the data shared by NSO, real GDP grew by 5.4% in the second quarter of the fiscal year 2024-25, a decrease from the growth rate of 8.1% in the same quarter of the previous fiscal year. Despite slow growth in the Manufacturing (2.2%) and Mining & Quarrying (-0.1%) sectors in the second quarter of the fiscal year 2024-25, real GVA in the first half of the year (April-September) saw a growth rate of 6.2%.
Real GVA increased by 5.6% in the second quarter of the fiscal year 2024-25, down from the growth rate of 7.7% in the same quarter of the previous financial year.
“Real GDP has been estimated to grow by 5.4% in Q2 of FY 2024-25 over the growth rate of 8.1% in Q2 of FY 2023-24. Despite sluggish growth observed in Manufacturing (2.2%) and Mining & Quarrying (-0.1%) sectors in Q2 of FY 2024-25, real GVA in H1 (April-September) has recorded a growth rate of 6.2%.
Real GVA has grown by 5.6% in Q2 of FY 2024-25 over the growth rate of 7.7% in Q2 of the previous financial year. Nominal GVA has witnessed a growth rate of 8.1 % in Q2 of FY 2024-25 over the growth rate of 9.3% in Q2 of FY 2023-24,” the government statement said.
The Agriculture and Allied sector has experienced a rebound, achieving a growth rate of 3.5% in Q2 of the fiscal year 2024-25. This growth follows a period of sub-optimal performance, with growth rates ranging from 0.4% to 2.0% in the previous four quarters.
In the Construction sector, consistent domestic consumption of finished steel has led to growth rates of 7.7% and 9.1% in Q2 and H1 of the fiscal year 2024-25, respectively.
The Tertiary sector has shown promising growth, with a rate of 7.1% in Q2 of the fiscal year 2024-25, up from 6.0% in Q2 of the previous financial year. Specifically, Trade, Hotels, Transport, Communication & Services related to Broadcasting have seen a growth rate of 6.0% in Q2 of FY 2024-25, an increase from the 4.5% growth rate in Q2 of the fiscal year 2023-24.
Private Final Consumption Expenditure (PFCE) has seen a notable increase, with growth rates of 6.0% and 6.7% in Q2 and H1 of the fiscal year 2024-25, surpassing the growth rates of 2.6% and 4.0% in Q2 and H1 of the previous financial year.
Real GDP or GDP at Constant Prices
Rs 44.10 lakh crore, up from Rs 41.86 lakh crore in Q2 of 2023-24, with a growth rate of 5.4%.
Nominal GDP or GDP at Current Prices: Rs 76.60 lakh crore, up from Rs 70.90 lakh crore in Q2 of 2023-24, with a growth rate of 8.0%.
Estimates for GVA in Q2 of 2024-25:
Real GVA: Rs 40.58 lakh crore, up from Rs 38.42 lakh crore in Q2 of 2023-24, with a growth rate of 5.6%.
Nominal GVA: Rs 69.54 lakh crore, up from Rs 64.35 lakh crore in Q2 of 2023-24, with a growth rate of 8.1%.
Economists identified several factors contributing to the dampened urban private consumption in India. These included increasing food inflation, elevated borrowing rates, and stagnant real wage growth. Together, these factors significantly impacted a key driver that makes up nearly 60% of India’s GDP. For example, retail food inflation soared to 10.87% in October, resulting in a notable decrease in purchasing power for consumers.
Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank, said: “The sharply lower than expected GDP figures reflects the highly disappointing corporate earnings data. The manufacturing sector appears to have taken the maximum beating. The high frequency data suggests that festive linked revival in activity may provide a marginally better 2H growth figure but overall GDP growth for FY25 is going to be around 100bps lower than RBI’s estimate of 7.2%. Despite the sharp slowdown in GDP growth we maintain our view of a pause by the RBI next week given elevated inflation and uncertain global environment.”