India’s GDP Growth Likely To Fall to 6.5 Per Cent In September Quarter, Says ICRA

However, the agency maintained its growth forecast for the 2024-25 fiscal year (FY25) at 7 per cent on anticipations of a recovery in economic activity in the latter half of the period under review

Official data for the economic activity for the second quarter is scheduled to be released on November 30, 2024.

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The real GDP growth rate of the Indian economy is expected to fall to 6.5 per cent in the September quarter in the current fiscal year, domestic ratings agency ICRA said. The ratings firm said this decline could be attributed to heavy rains and underwhelming corporate performance.

However, the agency maintained its growth forecast for the 2024-25 fiscal year (FY25) at 7 per cent on anticipations of a recovery in economic activity in the latter half of the period under review, reported PTI.

Notably, there have been concerns regarding the slowdown in growth on the basis of multiple factors like muted urban demand. The RBI is also maintaining its estimate of 7.2 per cent growth in FY25, while majority of the experts project the growth figures to be below 7 per cent.

Official data for the economic activity for the second quarter is scheduled to be released on November 30, 2024.

In the first quarter, the GDP growth rate touched 6.7 per cent. ICRA noted, “While government spending and kharif sowing have shown positive trends, the industrial sector, particularly mining and electricity, is expected to slow down.”

The agency noted that the services sector is anticipated to improve and this should lead to a full-year GDP growth of 7 per cent. 

Aditi Nayar, Chief Economist, ICRA noted, “Q2 FY2025 saw tailwinds in terms of a pick-up in capex after the Parliamentary Elections as well as healthy expansion in sowing of major kharif crops. Several sectors faced headwinds on account of heavy rainfall, which affected mining activity, electricity demand, retail footfalls, and a contraction in merchandise exports.”

The economist stated that the advantages of the healthy monsoons lie ahead, backed by higher kharif output and replenished reservoirs that should help rural sentiment surge.