India GDP Growth Slips to 5.4% in Q2 FY25, Lowest in 7 Quarters; Manufacturing Drags

<p>India gross domestic product grew at 5.4% in the July-September quarter of FY25, sharply missing the 6.5% consensus forecast and marking the slowest pace of growth in seven quarters, according to data released by the National Statistical Office (NSO). The number triggered a sharp reaction in financial markets and prompted the government to convene an emergency review with key ministries.</p><p>Manufacturing GVA contracted 0.8% year-on-year, reversing four consecutive quarters of positive growth. Private consumption slowed to 6% from 7.3% in the previous quarter. The agriculture sector showed resilience, growing 3.5% on the back of a good kharif harvest.</p><p>Finance Minister Nirmala Sitharaman acknowledged the "transient factors" contributing to the slowdown while expressing confidence that Q3 and Q4 would see a recovery. The IMF had projected full-year growth of 7% for India, a target that now looks optimistic.</p>