Sat Nov 30 17:16:45 UTC 2024: ## India’s GDP Growth Slumps to Seven-Quarter Low

**NEW DELHI** – India’s real Gross Domestic Product (GDP) growth plummeted to a seven-quarter low of 5.4 percent in the July-September 2024 quarter (Q2), according to data released Friday by the National Statistics Office (NSO). This marks a significant slowdown from 6.7 percent in the previous quarter (April-June) and 8.1 percent in the same period last year. The figure also fell short of economists’ consensus estimates by at least one percentage point.

The slowdown was primarily attributed to sluggish growth in the manufacturing sector (2.2 percent growth compared to 7 percent in Q1 and 14.3 percent in Q2 2023) and a contraction in mining and quarrying (-0.1 percent). Chief Economic Advisor V Anantha Nageswaran described the growth as “disappointing but not alarming,” citing factors such as excess capacity and import dumping impacting manufacturing.

Despite the overall slowdown, some sectors showed positive performance. Agriculture grew by 3.5 percent, and the construction sector maintained robust growth at 7.7 percent. However, the services sector also underperformed expectations, registering 7.1 percent growth.

While acknowledging the lower-than-expected growth, Nageswaran expressed optimism, suggesting that deregulation, increased public investment, and improved private sector compensation policies would boost future growth. He cautioned against overly pessimistic interpretations of the Q2 figures, stating it was too early to declare the government’s projected 6.5-7 percent full-year growth target at risk. The Reserve Bank of India (RBI) maintains a more optimistic outlook, projecting 7.2 percent growth for 2024-25 and 7.1 percent for the following fiscal year. The government also asserts there is “no significant downside risk” to its projection.

The lower-than-expected GDP growth has raised concerns about a potential cyclical slowdown, prompting calls for policy adjustments. However, the CEA refrained from commenting on the need for an interest rate cut, deferring to the RBI’s assessment of the situation.

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