New Delhi: India’s economic growth slowed sharply in the second quarter of this financial year, spanning June to September 2024, with growth in the gross domestic product (GDP) coming in at a near two-year low of 5.4 percent.
This is significantly slower than the 7 percent growth the Reserve Bank of India (RBI) had predicted for the quarter in its October monetary policy announcement.
This slowdown — compounding a lower-than-expected growth of 6.7 percent in Q1 — has meant that GDP growth in the first half of this financial year has overall slowed to 6.2 percent, the slowest since the pandemic year of 2020-21.
The Q2 growth was pulled down by a decline in the secondary sector — comprising manufacturing, electricity, gas and other utilities, and also the construction sector. However, agriculture and services fared better in Q2 this financial year than they did in the same quarter last year.
Growth in the manufacturing sector slowed sharply to 2.2 percent in Q2, down from 7 percent in Q1, and 14.3 percent in the Q2 last year. This has meant the sector’s growth in the first half of this financial year has slowed to 4.5 percent as compared to 9.6 percent in the first half of the last financial year.
The construction sector — so far resilient to the overall slowdown in the economy — has also shown signs of weakness in Q2. The sector grew 7.7 percent in the second quarter, which would seem relatively robust except when compared to the 10.5 percent growth in Q1 and 13.6 percent in Q2 last year.
Still, the sector grew by a robust 9.1 percent in the first half of this financial year, albeit somewhat slower than the 11 percent seen in the same period last year.
The “electricity, gas, water supply & other utility services” sector saw growth slowing to 3.3 percent in Q2, from 10.4 percent in Q1 and 10.5 percent in the last Q2.
The agriculture sector grew 3.5 percent, up from 2 percent in Q1 and 1.7 percent in Q2 last year. Over the first half of the year, the agriculture sector grew 2.7 percent as compared to 2.8 percent in the first half of last year.
The mining and quarrying sector was the only one to witness a contraction, of 0.1 percent, in Q2 this financial year, down from 7.2 percent in Q1 and 11.1 percent growth in Q2 last.
However, the overall primary sector — taking agriculture and mining together — grew by 3 percent in Q2, faster than 2.7 percent in Q1 and 2.9 percent in Q2 last year.
The overall tertiary sector — capturing the various services sectors — grew by 7.1 percent in Q2 this financial year, significantly faster than the 6 percent in Q2 of the previous financial year.
(Edited by Tikli Basu)
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