New Delhi: The GDP growth rate has slumped to a seven-quarter low of 5.4% in the July-September quarter of 2024. This decline is largely attributed to sluggish growth in manufacturing and a deceleration in mining and quarrying.
The manufacturing sector, which accounts for over 17% of the total Gross Value Added (GVA) output, grew by just 2.2% in July-September, down from 7% in April-June and 14.3% in the corresponding period last year, data released by the National Statistics Office (NSO) suggested, The Indian Express reported.
Mining and quarrying were also severely impacted by extended rainfall, resulting in a contraction of 0.1% in July-September. This is a significant decline compared to the 7.2% growth in the previous quarter and 11.1% in the year-ago period.
However, there were some bright spots in the economy. Agriculture grew 3.5% in July-September, up from 2% in the previous quarter and 1.7% in the year-ago period. The construction sector also recorded a high single-digit growth of 7.7% in Q2, although this is lower than the 10.5% growth in Q1 and 13.6% in the year-ago period.
The services sector grew slower than expected at 7.1% in Q2, down from 7.2% in Q1 and 6% in the corresponding period a year ago. Private final consumption expenditure, a key indicator of consumption demand, rose 6% to Rs 24.82 lakh crore in the July-September quarter, marking a slowdown from the 7.4% growth in the previous quarter and a significant improvement from the 2.6% growth in the same period last year.
Government final consumption expenditure expanded by 4.4% in the second quarter, rebounding from a 0.2% contraction in the first quarter, although it fell short of the 14% growth recorded in the same quarter last year.
The Reserve Bank of India (RBI) has projected a higher GDP growth rate of 7.2% for 2024-25 and 7.1% for FY26. The Economic Survey has also projected a growth rate of 6.5-7% for the full financial year.
