India's Q2 FY25 GDP Growth: Analysis of 5.4% Rise

Introduction

India’s Gross Domestic Product (GDP) is a crucial indicator of the country’s economic health and growth. The latest data for the second quarter of the fiscal year 2024-25 (Q2 FY25) has been released, revealing some interesting trends and comparisons. In this article, we will delve into the latest news, compare quarterly performances, analyze weekly sector performances, and highlight the strong sectors in the Indian economy.

Latest News on Indian GDP

The National Statistics Office (NSO) recently released the GDP data for Q2 FY25, showing a growth rate of 5.4%, which is the lowest since Q3 FY23. This figure falls short of the 6.5% growth projected by analysts for the September quarter. The Reserve Bank of India (RBI) has retained its GDP growth forecast for the fiscal year at 7.2%, but several private economists have revised their projections downward.

Quarterly Comparisons

Comparing the GDP growth rates across different quarters provides a clearer picture of the economic trends:

Quarter	GDP Growth Rate
Q1 FY24	8.1%
Q2 FY24	6.7%
Q3 FY24	6.5%
Q4 FY24	6.2%
Q1 FY25	6.0%
Q2 FY25	5.4%

The data shows a consistent decline in GDP growth rates over the past few quarters, with Q2 FY25 marking the lowest growth rate in seven quarters.

Weekly Sector Performance

Analyzing the performance of different sectors on a weekly basis helps identify trends and potential areas of concern:

Manufacturing Sector: The manufacturing sector grew by 2.2% in Q2 FY25, compared to 14.3% in the same quarter last year. This significant slowdown has been a major drag on overall economic performance.
Services Sector: The services sector grew by 7.1% in Q2 FY25, slightly higher than 6.0% in Q2 FY24 but almost flat compared to 7.2% in Q1 FY25.
Agriculture Sector: The agriculture sector grew by 3.5% in Q2 FY25, compared to 1.7% in Q2 FY24. Despite its consistent performance, its contribution to overall growth remains modest.

Strong Sectors in the Indian Economy

Despite the overall slowdown, some sectors have shown resilience and strong performance:

IT and Technology: The IT sector continues to be a strong performer, contributing significantly to India’s GDP. The sector has benefited from increased digitalization and remote work trends.
FMCG (Fast-Moving Consumer Goods): The FMCG sector has also shown robust growth, driven by rising consumer demand and increased spending on essential goods.
Financial Services: The banking and financial services sector has remained stable, with steady growth in credit and financial activities.

Conclusion

The latest GDP data for Q2 FY25 highlights the challenges faced by the Indian economy, with a significant slowdown in the manufacturing sector and weaker urban consumption. However, the services and agriculture sectors have shown some resilience, and the IT and FMCG sectors continue to perform strongly. Policymakers and businesses will need to closely monitor these trends and take appropriate measures to support economic recovery and growth.

India’s Q2 FY25 GDP Growth: Quarterly Comparisons, and Sector Performance