India's economic growth slowed more sharply than anticipated in the July-September period of FY25, dropping to a seven-quarter low of 5.4 per cent, surprising analysts who had projected growth to hover around 6.5 per cent in the quarter.
The deceleration in growth momentum, driven by an industrial slowdown and a moderation in investment demand, has raised concerns among analysts.
These factors suggest the current forecast of around 7 per cent growth for FY25 may need to be revised downwards. If this trend continues, it could lead to a reassessment of the economic outlook by forecasting agencies.
As a result of this weaker-than-expected growth, there could be a higher probability of a policy rate cut by the Reserve Bank of India during its Monetary Policy Committee meeting in February.
The data released by the National Statistical Office on Friday showed gross value added (GVA) grew at 5.6 per cent as the net taxes growth declined to a seven-quarter low of 2.7 per cent in Q2 of FY25. The difference between the gross domestic product (GDP) and GVA is net taxes.
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