India's Economic Roadblock: Growth Slows Amidst Manufacturing Slump

India's economic growth slowed significantly in the third quarter, primarily due to weaker manufacturing and consumption, increasing pressure on the central bank for interest rate cuts. GDP rose by 5.4% year-on-year, the slowest in seven quarters, falling short of expectations as inflation and sluggish urban demand played a role.

India's economic growth decelerated sharply in the third quarter, heavily influenced by subdued manufacturing and consumer activity, heightening expectations for potential interest rate reductions by the central bank.

Recent government data revealed a 5.4% year-on-year GDP increase for July-September, marking the slowest growth in seven quarters and missing the 6.5% estimate from a Reuters poll.

With inflation biting into urban consumer demand and corporate earnings showing signs of strain, analysts predict increasing foreign outflows and pressure on policymakers to bolster the economy through monetary interventions.

(With inputs from agencies.)