India's Q2 GDP growth shrinks to 5.4%, lowest in 7-quarters
India's Gross Domestic Product (GDP) growth fell to a seven-quarter low of 5.4% in the second quarter of FY25, data released by the Ministry of Statistics and Programme Implementation today showed. The growth had previously stood at 6.7% in the last quarter and 8.1% annually. The latest figures also missed the predictions of a group of economists in a Moneycontrol poll, which had pegged median growth at 6.5%.
GVA numbers highlight slowing pace of India's economic growth
The Gross Value Added (GVA), which measures economic activity across sectors, has also slowed down. It expanded by 5.6% in Q2, missing the estimated 6.5%. This is a major decline from the year-on-year growth of 7.7% and the previous quarter's expansion at 6.8%. The GVA numbers further highlight the slowing pace of India's economic growth during this period.
Mixed sectoral performance in Q2
India's agriculture sector performed well, witnessing a growth of 3.5%, up from last quarter's 2% and last year's 1.7%. However, the mining sector contracted by -0.1%, a sharp decline from its last year's year-on-year growth of 11.1% and Q1 FY25's 7.2% expansion. The manufacturing sector also witnessed a major slowdown with growth plummeting to just 2.2%, against last year's same quarter at 14.3% and the previous quarter at 7%.
Electricity, construction sectors witness growth deceleration
The electricity sector's growth rate slowed down to 3.3%, a sharp decline from last year's 10.5% and the previous quarter's 10.4%. Construction, a key driver of economic activity, posted a growth of 7.7%, lower than last year's corresponding period at 13.6% and Q1 FY25 at 10.5%. These numbers reflect a deceleration in key sectors contributing to India's GDP growth during this quarter.
Trade, financial services sectors record marginal growth
The trade, hotels, and transport sector registered a marginal improvement with 6% growth, against last year's 4.5% and the previous quarter's 5.7%. Financial, real estate, and professional services grew by 6.7%, slightly better than last year's 6.2% but lower than the previous quarter's 7.1%. Public administration and other services grew by 9.2%, up from last year's corresponding period at 7.7% but slightly lower than Q1 FY25 at 9.5%.
