GDP growth is expected to slow to 6.2-6.9 percent this quarter due to factors such as heavy rains and weak corporate margins.
India’s GDP growth data for the latest July-September 2024 quarter (Q2 FY25) will be released on Thursday at 4 pm. According to analysts, GDP is expected to decelerate to 6.2-6.9 percent this quarter due to factors such as heavy rains and weak corporate margins.
During the previous June 2024 quarter (Q1 FY25), India’s economy grew by 6.7 percent. In the corresponding quarter of last year (Q2 FY24), the country registered an economic growth of 7.6 percent.
In the latest Q2FY25, Bank of Baroda expects GDP growth of 6.9 percent, while IDFC First Bank pegs it at 6.2 percent. Rating agencies ICRA and India Ratings said growth is likely to be 6.5 percent and 6.6 percent, respectively. State Bank of India (SBI) expects growth to slow to 6.5 percent and global financial services company Nomura sees Q2FY25 GDP growth of 6.3 percent.
According to the Reserve Bank of India (RBI) in its October bulletin, India’s Q2 GDP growth is expected to be 6.8 percent. That is lower than its previous estimate of 7 percent.
India’s GDP growth is projected to slow to 6.5 percent in Q2 of FY2025 due to factors such as heavy rains and weak corporate margins. While government spending and kharif sowing have shown a positive trend, the industrial sector, particularly mining and power, is expected to slow down,” ICRA said in its note.
However, it added that despite these challenges, the services sector is expected to improve, and back-end recovery is expected, leading to full-year GDP growth of 7.0 percent.
However, risks such as slowdown in personal loan growth and geopolitical uncertainty remain, ICRA said.
SBI said in its report, “Indices in consumption and demand, agriculture, industry, service and other indicators, which indicate a decline in Q2FY25. The percentage of indicators showing acceleration declined to 69 per cent in Q2 FY25 from 80 per cent in Q2 FY24 and 78 per cent in Q1 FY25.”
However, it added that an expected pick-up in Q3 and Q4 growth figures could still push overall annual GDP growth closer to 7 percent in FY25.