India's GDP Growth Falters Amid Economic Challenges

India's economy grew by only 5.4% in July-September, below expectations. Factors such as weak urban consumption and a slowdown in manufacturing and government expenditure contributed to this result. Economists predict potential monetary policy adjustments by the RBI, given elevated inflation and global uncertainties.

India's economic growth lagged behind expectations, registering a minimal 5.4% expansion in the July-September quarter. This sluggish growth was driven by a significant dip in urban consumption and a slower pace in the manufacturing sector.

Economists like Aditi Nayar from ICRA and Gaura Sen Gupta of IDFC First Bank point to weakened corporate profits and reduced capex as contributing factors. The RBI is expected to maintain current rates but may consider a rate cut in the near future if inflation subsides.

Vivek Kumar from QuantEco Research and Sakshi Gupta from HDFC Bank noted the potential for improved growth in the latter half of FY25, driven by favorable agricultural conditions and increased government spending. However, global uncertainties, especially in the potential Trump 2.0 regime, pose a looming threat.