Mumbai
India’s GDP growth estimate for the September quarter to 6.5%, citing factors like heavy rains and weaker corporate performance. However, the domestic rating agency maintained its overall growth forecast for FY25 at 7%, according to a report on Wednesday.
This estimate comes amid concerns about slowing economic growth, driven by factors such as reduced urban demand. While the RBI continues to project a 7.2% growth rate, most experts expect the figure to fall below 7%, with several analysts adjusting their projections downward in recent weeks.
ICRA’s chief economist, Aditi Nayar, explained that the Q2 slowdown was mainly due to challenges in sectors like mining, electricity, and retail, affected by the monsoon. While government spending and healthy kharif sowing have been positive, a recovery in the services sector is expected to support growth in the latter half of FY25.
ICRA also noted a rebound in new project announcements, which totaled Rs 6.7 lakh crore in Q2, indicating future investment growth. However, there are concerns about the impact of slower personal loan growth on private consumption and the potential effects of global geopolitical developments.
