India's GDP Growth Slows To 5.4 Per Cent In Second Quarter Of FY25

India's real GDP growth decelerated to 5.4 per cent in Q2 FY25, a significant drop from 8.1 per cent during the same period last year and 6.7 per cent in Q1 FY25, according to data released by the National Statistics Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI). This marks the slowest growth in the past seven quarters.

Meanwhile, The GVA growth rate for Q2 FY25 stood at 5.6 per cent, down from 7.7 per cent in Q2 of the previous year, and nominal GVA growth was pegged at 8.1 per cent, compared to 9.3 per cent in Q2 FY24.

Sectoral Highlights:

1. Manufacturing and Mining Struggles:

Manufacturing grew at a sluggish 2.2 per cent, while Mining & Quarrying contracted by -0.1 per cent, reflecting muted momentum in industrial activity.

Overall, real Gross Value Added (GVA) recorded a growth rate of 5.6 per cent in Q2 FY25, compared to 7.7 per cent in Q2 FY24, signaling broad-based slowdowns.

2. Agriculture Revival:

3. Construction and Services Sector Gains:

The Construction sector maintained robust growth at 7.7 per cent in Q2, driven by sustained domestic steel consumption.

The Tertiary sector, including Trade, Hotels, Transport, and Communication, grew by 7.1 per cent, up from 6.0 per cent in Q2 FY24.

4. Private and Government Consumption:

Private Final Consumption Expenditure (PFCE) rose by 6.0 per cent, a notable increase from 2.6 per cent in Q2 FY24, signalling stronger consumer demand.

Government Final Consumption Expenditure (GFCE) rebounded with 4.4 per cent growth, ending three-quarters of negative or low growth rates. Despite pockets of resilience in consumption and services, overall GDP growth fell short of expectations.

A Bloomberg poll of economists had projected GDP growth at 6.5 per cent, while the RBI had forecasted 7.2 per cent for Q2 FY25. The weaker-than-expected performance underscores challenges in reviving industrial activity and maintaining economic momentum across sectors.