India’s Economy Slows in July-September
- India’s economy expanded by only 5.4% year-on-year in July-September, despite a 6.5% increase in GDP.
- The growth in GDP was lower than the 6.5% projected by a Reuters poll and the central bank’s 7% estimate.
- Despite this, India remains one of the fastest-growing major economies, with government officials and economists forecasting a potential regaining of momentum in the second half of the fiscal year.
- The Reserve Bank of India (RBI) predicted GDP growth of 7.2% for the fiscal year ending in March 2025.
- Private consumption, accounting for 60% of GDP, has been hit by slower urban spending due to higher food inflation, high borrowing costs, and weak real wage growth.
- India’s finance and trade ministers have called for interest rate cuts, but the central bank is expected to keep policy rates unchanged next week.
