New Delhi, December 6 (IANS). India’s GDP growth rate estimate for fiscal year 2024-25 has been reduced to 6.6 percent by the Reserve Bank of India. Earlier it was 7.2 percent. This information was given by RBI Governor Shaktikanta Das on Friday.
He said that this decision was taken because the real gross domestic product (GDP) growth of 5.4 percent in the second quarter of this year was much lower than expected.
Das further said that India’s growth story continues. High frequency indicators are showing that the slowdown in domestic economic activities has bottomed out in the second quarter of the current financial year. The reason for this is the improvement in demand due to the festive season and increase in rural activities.
Das said the decline in growth was due to a sharp decline in the industrial growth rate, which declined from 7.4 percent in the first quarter to 2.1 percent in the second quarter. This was due to weak performance of manufacturing companies, decline in mining activities and low demand for electricity.
It further said that the weakness in the manufacturing sector was not widespread, but limited to specific sectors such as petroleum products, iron and steel and cement. Industrial activity is expected to normalize and recover from the low level of the previous quarter.
RBI has reduced the GDP growth rate estimate in the third quarter of financial year 2024-25 from 7.4 percent to 6.8 percent. At the same time, the GDP growth rate estimate for the fourth quarter has been reduced from 7.4 percent to 7.2 percent. The GDP growth rate estimate for the first quarter of financial year 2025-26 has been reduced from 7.3 percent to 6.9 percent.
After the October MPC, the RBI had estimated India’s GDP growth rate at 7.2 percent for the financial year 2024-25, which was higher than the Finance Ministry’s Economic Survey estimate of 6.5 to 7 percent.
–IANS
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