ECONOMY
Manufacturing, private consumption drag down GDP growth in Q2 of FY25 to 5.4%
- IBJ Bureau
- Nov 30, 2024
Economic growth slowed to a near two-year low of 5.4 per cent in the July-September quarter of this financial year. The subdued growth was mainly because of poor performance of manufacturing and mining sectors as well as weak consumption.
Gross Domestic Product (GDP) had expanded by 8.1 per cent in the July-September quarter of 2023-24 and 6.7 per cent in first quarter of the current financial year (April-June 2024).
The previous low level of GDP growth at 4.3 per cent was recorded in the third quarter (October-December 2022) of 2022-23.
The data also showed that growth of private final consumption expenditure (PFCE), which indicates consumer spending, decelerated to 6 per cent in the September quarter from 7.4 per cent in April-June this year.
However, India remained the fastest-growing major economy as China’s GDP growth in the July-September quarter this year was at 4.6 per cent.
“Real GDP growth print of 5.4 per cent is on the lower side, and it is disappointing, but there are some bright spots,” Chief Economic Adviser V Anantha Nageswaran said while addressing the media on Friday.
Agriculture and allied sector and construction sector are some of the bright spots, he added.
According to the National Statistical Office (NSO) data, growth of agriculture sector GVA (Gross Value Added) accelerated to 3.5 per cent in the latest July-September quarter from 1.7 per cent a year ago.
The GVA in the manufacturing sector slowed to 2.2 per cent in the second quarter of FY25 compared to an expansion of 14.3 per cent in the year-ago period.
GVA in the mining and quarrying contracted to 0.01 per cent in the second quarter against a growth of 11.1 per cent a year ago.
Expansion in financial, real estate and professional services GVA was 6.7 per cent, up from 6.2 per cent in the year-ago quarter.
Electricity, gas, water supply and other utility services grew by 3.3 per cent, slower than 10.5 per cent a year ago.
Construction sector recorded growth of 7.7 per cent in the second quarter, down from 13.6 per cent year on year.
“Real GDP or GDP at constant prices in Q2 of 2024-25 is estimated at Rs 44.10 lakh crore against Rs 41.86 lakh crore in Q2 of 2023-24, showing growth rate of 5.4 per cent,” the NSO said in a statement.
Nominal GDP or GDP at current prices in Q2 of 2024-25 is estimated at Rs 76.60 lakh crore, against Rs 70.90 lakh crore in Q2 of 2023-24, showing growth rate of 8 per cent, it added.
On a half-yearly basis, the statement said that the GDP in April-September of 2024-25 (H1 FY25) is estimated at Rs 87.74 lakh crore against Rs 82.77 lakh crore in the first half of 2023-24, showing growth rate of 6 per cent.
Nominal GDP or in H1 2024-25 is estimated at Rs 153.91 lakh crore, against Rs 141.40 lakh crore in H1 of 2023-24, showing growth rate of 8.9 per cent, it stated.
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