Sat Nov 30 06:27:39 UTC 2024: ## India’s GDP Growth Slumps to Seven-Quarter Low

**New Delhi, November 29, 2024** – India’s real GDP growth plummeted to a seven-quarter low of 5.4% in the July-September 2024 quarter, significantly underperforming even the most pessimistic forecasts. This represents a sharp decline from the 6.7% recorded in the previous quarter and the 8.1% growth seen in the same period last year. The Gross Value Added (GVA) also slowed to 5.8%, down from 6.8% in Q1.

Economists have expressed concern over this unexpected slowdown. While the Reserve Bank of India (RBI) had projected 6.8% growth and the Finance Ministry anticipated growth between 6.5% and 7%, the latest figures suggest a significant shortfall. The slower-than-expected growth is attributed to disappointing corporate earnings and a particularly weak performance in the manufacturing sector, which saw growth shrink to 2.2% from 14.3% in the same quarter last year. Other sectors also experienced deceleration, with Mining and Quarrying even contracting by 0.1%.

However, there were some positive indicators. Private Final Consumption Expenditure (PFCE) grew by 6%, although this represents a slowdown from the previous quarter. The agricultural sector also showed improved growth at 3.5%.

Chief Economic Advisor V. Anantha Nageswaran expressed optimism, suggesting the 5.4% figure might be a temporary anomaly due to cooling urban demand. He cautioned against extrapolating this data to predict full-year growth, emphasizing that the first estimates for 2024-25 will be released in January.

Despite the positive notes, experts like Kotak Mahindra Bank’s chief economist Upasna Bhardwaj believe the full-year growth could fall short of the RBI’s 7.2% projection by approximately one percentage point. D.K. Srivastava of EY India highlighted a significant contraction in central government investment expenditure as a major contributor to the slowdown.

The National Statistics Office (NSO) will release updated full-year growth estimates in January, providing a clearer picture of India’s economic performance for 2024-25.

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