India’s economy grew by 6.2% in the December quarter, an improvement from 5.6% in the previous quarter, but still lower than expected.
The 6.2% growth makes the government’s full-year growth target of 6.5% seem unlikely due to global challenges, such as tariffs and weak performance in manufacturing and services sectors.
Primary Sector: Growth in agriculture and related areas was strong (5.2%), up from 1.8% last year.
Secondary Sector: Manufacturing growth slowed to 4.8% from 12.4% last year.
Tertiary Sector: Services growth slowed to 7.4% from 8.3% last year.
India’s manufacturing and pharma sectors face risks from U.S. tariffs, such as the proposed 25% import tariff on steel and pharmaceuticals, affecting trade revenue.
Positive Signs:
Government spending grew by 8.3% and private consumption by 6.9%.
Inflation has moderated, with the RBI predicting it will average 4.8% in FY25, aligning with the medium-term target of 4%.
The National Statistical Office (NSO) revised its data methodology but hasn’t clarified the impact of these changes, raising questions about the quality of the data.
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