India’s GDP growth has slowed down significantly from 8.1% to 5.4% in Q2 FY25, driven by weaker consumption and adverse weather impacts on key sectors. This aligns with economist predictions of 6.5% growth, citing factors like subdued urban demand, reduced government spending, and disruptions in mining and electricity. Rising food inflation, higher borrowing costs, and stagnant real wages have contributed to reduced consumption. Despite this, the RBI has maintained its FY25 growth forecast at 7.2%.
The slowdown has sparked various opinions and analyses. Some attribute it to the global economic situation and restrictive economic policies by the government, such as high taxes on petrol and diesel. Others point to low government spending in the first five months of this fiscal year. The majority, however, blame inflation, which they argue is much higher than what is being reported. Suggestions include reducing taxes and interest rates to encourage spending and investment, and putting more money in the hands of the people. Despite the slowdown, some remain optimistic about India’s long-term economic prospects.
click me for original post link – post sentiment : negative
Leave a Reply