GDP: Growth slips to two-year low of 5.4% in second quarter, figures hit by declining consumption

New Delhi| India’s economic growth slowed to a near two-year low of 5.4 per cent in the July-September quarter of the current fiscal year, compared to 8.1 per cent in the same quarter a year earlier. Its official figures were released by the government.

However, India remained the fastest growing major economy. In the July-September quarter of this year, China’s GDP growth stood at 4.6 percent. The previous low level of GDP growth of 4.3 per cent was recorded in the third quarter (October-December 2022) of fiscal year 2022-23.

According to National Statistical Office (NSO) data, the agriculture sector’s GVA (gross value added) increased to 3.5 per cent in the July-September quarter of 2023-24 from 1.7 per cent a year earlier. The GVA growth rate of the manufacturing sector declined to 2.2 percent in the second quarter of the current financial year, compared to 14.3 percent growth recorded a year ago.The growth in the country’s gross domestic product (GDP) during the April – September period in 2024-25 stood at 6 per cent compared to 8.2 per cent in the first half of the previous fiscal year. GDP growth had remained unchanged at 6.7 per cent in the first quarter of the current fiscal year. Growth in key infrastructure sectors declined to 3.1 percent in October 2024 from 12.7 percent in the same month a year earlier, according to government data.

GVA growth in financial, real estate and business services stood at 6.7 per cent, up from 6.2 per cent in the same quarter a year earlier. The growth rate for electricity, gas, water supply and other utility services stood at 3.3 per cent, down from the 10.5 per cent growth rate a year earlier. The construction sector recorded a 7.7 per cent growth in the second quarter, down from 13.6 per cent in the same quarter of the previous year.

Gross domestic product (GDP) growth remained unchanged at 6.7 percent during the April – June quarter of 2024-25. “Real GDP or GDP at constant prices is projected to be Rs 44.10 lakh crore in Q2 2024-25, compared to Rs 41.86 lakh crore in Q2 2023-24, representing a growth rate of 5.4 per cent”, NSO said in a statement.

According to NSO data the nominal GDP or GDP at current prices is estimated to be Rs 76.60 lakh crore in the second quarter of 2024-25, compared to Rs 70.90 lakh crore in the second quarter of 2023-24, representing a growth rate of 8.0 per cent

The statement said that on a half-yearly basis, real GDP or GDP at constant prices in April-September (first half of FY25) of 2024-25 is estimated to be Rs 87.74 lakh crore, while in the first half of 2023-24 it will be Rs 82.77 lakh crore, representing a growth rate of 6 per cent.

It said nominal GDP or GDP at current prices is projected to be Rs 153.91 lakh crore in the first half of 2024-25, compared to Rs 141.40 lakh crore in the first half of 2023-24, representing a growth rate of 8.9 per cent.

Meanwhile, government data showed that the Centre’s fiscal deficit reached 46.5 per cent of the full-year target at the end of the first seven months of the current fiscal year. According to data released by the Comptroller General of Accounts (CGA), the fiscal deficit in real terms – the gap between the government’s expenditure and revenue – stood at Rs 7,50,824 crore during the April-October period. In the same period of the year 2023-24, the deficit stood at 45 per cent of the budget estimate (BE). According to RBI, India’s foreign exchange reserves declined by $1.31 billion to $656.582 billion in the week ending November 22.