India's Q2 GDP Grows At 7-Quarter Low Of 5.4% But Remains Fastest In The World

Latest News: In July-September 2024, India's GDP grew by 5.4 per cent, as per the latest official India Q2 GDP figures released on Friday. Despite being the slowest growth in seven quarters, India is the fastest large economy on the planet.

Growth of 5.4 per cent during Q2 FY25 falls short of the expectation of analysts to see India GDP Growth Rate around 6.2 per cent- 6.9 per cent. "Real India Q2 GDP data would grow 5.4% in Q2 FY 2024-25 versus 8.1% in Q2 FY 2023-24," the finance ministry said in a statement.

Production remained largely ahead of estimates, up 2.2 per cent Q2FY25 over 5 per cent estimates. It had been 7 per cent in the prior quarter.

Despite the 7-8 per cent rise, retail sales, hotel rooms, transportation, communications and broadcasting-related services grew only 6 per cent.

Its GDP had increased by 6.7 per cent in the earlier April-June India GDP 2024 (Q1 FY25) quarter. It was up 8.1 per cent from the previous year (Q2 FY24).

Meanwhile, the latest data from the National Statistical Office (NSO) revealed that India’s GVA (GDP minus net product tax; the rate of increase in supply) increased by 5.6 per cent between July and September 2024.

Gross fixed capital formation (GFCF), a measure of India’s investment activity, was reduced to 5.4 per cent, or Rs 15.13 lakh crore, in the September 2024 quarter. The GFCF alone accounts for about 35 per cent of GDP.

Private final consumption expenditure (PFCE) rose by 6 per cent during Q1 FY25 to Rs 24.82 lakh crore as per RBI Annual Report.

Government final consumption expenditure (GFCE) dropped 4.4 per cent YoY to Rs 4 lakh crore.

In comparison, US GDP increased by 2.8 per cent during the July-September 2024 quarter. The UK gained only 0.1 per cent. China grew 4.6 per cent in the third quarter (Q3), far from 5 per cent in FY25. Japan gained 0.9 per cent over the quarter.