India Q2 FY25 GDP Growth Data 2024 Live: Industrial slowdown to impact Q2 GDP, India’s growth estimated between 6.3% and 6.6%

Fiscal deficit likely to be lower by 19 bps than budget estimates, says India Ratings. 

Centre’s fiscal deficit, the difference between the expenditure and the income, is likely to be 19 basis points (bps, 100 bps mean 1 percentage point) lower than the budget estimates during current fiscal, i.e., Fiscal Year 2024-25, India Ratings & Research (Ind-Ra) said on Wednesday.

Finance Minister Nirmala Sitharaman, while presenting full budget in July this year, had pegged the deficit at 4.9 per cent of GDP. She also said: “The fiscal consolidation path announced by me in 2021 has served our economy very well, and we aim to reach a deficit below 4.5 per cent next year.”

DK Srivastava, Chief Policy Advisor at EY India, cited the contraction in the Government of India’s capital expenditure, which decreased by (-)15.4 per cent during April-September, as one of the main reasons for the slowdown. He emphasised that both fiscal and monetary policy actions are needed at this stage. However, “fiscal policy action in the form of accelerated government investment expenditure should be given the highest priority while monetary policy action may be delayed beyond December 2024. Eventually, as the US Fed continues to roll down its policy rates, India may also follow suit,” he said. 

Aditi Nayar, Chief Economist and Head of Research & Outreach at ICRA, said that Q2 saw tailwinds in terms of a pickup in capex after the Parliamentary Elections, as well as healthy expansion in sowing of major kharif crops. However, several sectors faced headwinds due to heavy rainfall, which affected mining activity, electricity demand, retail footfalls, and led to a contraction in merchandise exports. Additionally, margins appear to have weakened for corporates in various sectors during this quarter. As a result, “we project a slight dip in India’s GVA and GDP growth in Q2 FY2025 to 6.6 per cent and 6.5 per cent, respectively,” she said.

In its report released earlier this week, ICRA projected a slowdown in growth due to heavy rains and weak margins, which offset the buoyancy driven by the turnaround in government capital expenditure and healthy trends in kharif sowing. Further, growth in gross value added (GVA) is estimated to ease to 6.6 per cent in Q2 from 6.8 per cent in Q1 FY2025, driven by the industrial sector (to +5.5 per cent from +8.3 per cent), amid a pick-up in expansion in services (to +7.8 per cent from +7.2 per cent) and agricultural GVA (to +3.5 per cent from +2.0 per cent).

Research agencies estimate that growth likely slowed during the July-September quarter (Q2) of the current fiscal. ICRA projected GDP growth to decline to 6.5 per cent in Q2, compared to 6.7 per cent in the April-June quarter. Earlier, an SBI research report also estimated growth at 6.5 per cent, while CareEdge appears slightly more optimistic, forecasting growth in the range of 6.6 per cent to 6.8 per cent. The RBI’s October bulletin projected a 6.8 per cent growth.

Due to a slowdown in industrial activity, the Indian economy is likely to have slowed down during the three-month period of July-September (Q2 of FY25), with growth estimated between 6.3 per cent and 6.6 per cent. The data will be formally released by the Statistics Ministry on Friday, November 29.

The economic growth rate, based on GDP (gross domestic product), was 6.7 per cent during the April-June quarter (Q1 of FY25). For the fiscal year as a whole, the growth rate is expected to reach 7 per cent.

On November 8, the Ministry of Statistics and Programme Implementation (MoSPI) said it has advanced the release of macroeconomic data ​Gross Domestic Product (GDP)​ estimates by about 90 mins to 4pm.

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​Q1 FY25​: 6.7%

​Q4 FY24​: 7.8%

​Q3 FY24​: 8.3%

​Q2 FY24​: 7.6%

​Q1 FY24​: 7.8%

India consolidated its position as the fastest-growing major economy globally as the Government’s Statistics office on Thursday released the Gross Domestic Product (GDP) data for second quarter spanning July to September months of the financial year 2023-24. 

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With a reduction in government expenditure during the general elections, India’s economy expanded at 6.7 per cent in the April-June quarter (Q1), marking the slowest pace in five quarters. Yet, the government asserted that the growth momentum is strong and a 6.5-7 per cent growth estimate for full fiscal is realistic.

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