India GDP Growth: Due to heavy rains and weak corporate quarterly results, the country’s GDP growth is likely to decline to 6.5 percent in the July-September quarter. Local rating agency ICRA has maintained its GDP growth forecast for FY 2024-25 at 7 percent amid expectations of an uptick in economic activity in the second six months of FY 2024-25.
Fear of recession in mining and power sectors
RBI has estimated GDP growth to be 7.2 percent for the current financial year 2024-25. Which is less than the estimate of 8.2 percent in 2023-24. The reason behind this is lack of urban demand and excess rainfall. GDP figures for the second quarter will be announced on November 30. GDP growth was recorded at 6.7 percent in the first quarter. However, GDP growth slowed in the second quarter due to extremely heavy rains and weak corporate quarter results. Positive trends are visible towards government expenditure and sowing of Kharif crops. But the mining and power sectors have seen a slowdown.
Positivity in agriculture sector
ICRA Chief Economist Aditi Nair said that capital expenditure will accelerate after the elections in the second quarter of the financial year 2024-25. Besides, there is a possibility of increase in sowing of Kharif crops due to good rains. The heavy rains have adversely affected various sectors including mining, power and retail. But there is hope that there will be a positive trend in the agriculture sector. Rural demand is likely to improve due to recharging of reservoirs. GDP growth will be influenced by changes in private consumption, increase in personal credit besides commodity prices and geopolitical crises.
