The Indian economy registered a real GDP growth of 5.4% during the July-September quarter (Q2) of FY 2024-25, as per data released by the Ministry of Statistics and Programme Implementation. This is significantly lower than the Reserve Bank of India’s (RBI) forecast of 7%.
Real GDP for Q2 stood at ₹44.10 lakh crore, compared to ₹41.86 lakh crore in the same quarter of the previous financial year, reflecting a moderate year-on-year increase. In comparison, the economy had recorded a stronger growth of 8.1% in the corresponding quarter last year.
For Q1 (April-June) of FY 2024-25, growth was recorded at 6.7%, also falling short of the RBI’s projection of 7.1%.
The RBI has pegged India’s GDP growth for the entire fiscal year 2024-25 at 7.2%, while the International Monetary Fund (IMF) and the World Bank forecast a slightly lower growth of 7.0%. Global rating agencies and multilateral organizations have generally maintained an optimistic outlook, with some revising their projections upwards.
RBI’s Revised Outlook
In its October monetary policy review, the RBI projected growth rates of 7.0% for Q2, 7.4% for Q3, and 7.4% for Q4. It also forecast real GDP growth of 7.3% for Q1 of FY 2025-26. Despite the current slowdown, the central bank expressed confidence in the medium-term outlook.
“The slack in the Indian economy observed in the second quarter is behind us,” the RBI stated in its latest bulletin, citing private consumption and festive spending as key drivers for the October-December period.
Historical Context and Projections
India remains the fastest-growing major economy globally, with GDP growth recorded at:
- 8.2% in FY 2023-24
- 7.2% in FY 2022-23
- 8.7% in FY 2021-22
The Economic Survey earlier this year conservatively estimated GDP growth at 6.5%-7% for FY 2024-25, aligning closely with market expectations.
Global Perspective
S&P Global Ratings this week maintained India’s GDP forecast at 6.8% for FY 2024-25 but revised down projections for subsequent years. Despite the short-term deceleration, India’s economic resilience and long-term growth prospects remain robust, supported by strong domestic demand and structural reforms.