Interview Times 
BHUBANESWAR: India’s economy experienced a notable slowdown in the first quarter of the 2024-25 financial year, with the country’s gross domestic product (GDP) growing at a significantly reduced rate. The latest government data reveals that GDP growth for the period April-June 2024 slipped to 6.7%, down from 7.8% in the preceding quarter and a stark decline from the 8.2% growth recorded in the same period last year.
Economists had projected a dip to 7% for the quarter, but the actual performance fell short of expectations. Analysts suggest that several factors contributed to this slowdown. Notably, curbs on government spending during the Lok Sabha elections, due to the model code of conduct, may have played a role in dampening economic activity. Additionally, the farm sector’s poor performance further impacted overall growth.
Despite the slowdown, certain sectors have shown resilience. Construction surged by 10.5%, while electricity, gas, water supply, and other utility services grew by 10.4%. Manufacturing also contributed positively, with a growth rate of 7.0%.
India continues to hold its position as the world’s fastest-growing major economy. In comparison, China’s GDP growth for the April-June quarter was significantly lower at 4.7%, albeit from a much larger economic base.
Positive outlooks from major ratings agencies reflect confidence in India’s economic prospects. Moody’s has increased its GDP growth forecast for India, projecting a growth rate of 7.2% for calendar year 2024 and 6.6% for 2025. Similarly, EY anticipates that India’s real GDP growth for FY2024-25 will fall between 7% and 7.2%.
Market reactions have been favourable, with the Nifty 50 index rising by 0.33% to close at 25,235.9 and the Sensex gaining 0.28% to end at 82,365.77. Both indices recorded their third consecutive weekly and monthly gains, rising 1.6% for the week and approximately 1% for August.
The overall sentiment remains optimistic, as the Indian economy continues to demonstrate robust growth potential despite current challenges.
