GDP data: India’s rapid growth set to moderate as consumers remain wary
Official data on Friday will likely show growth moderated last quarter from near-8% pace previously, largely due to a slowdown in government spending before the elections. Recent indicators show consumer sentiment is waning and rural spending still hasn’t recovered to pre-Covid levels. A looming slowdown in the global economy is another major risk to the outlook.
Goldman Sachs Group Inc. has already trimmed India’s growth forecast for the current calendar year by 20 basis points to 6.7%, while Bloomberg Economics lowered its projection for the fiscal year through March 2025 to 6.8% from 7.2%.
That’s putting pressure on the Reserve Bank of India to begin cutting interest rates after staying on hold for more than 18 months. The central bank has been reluctant to pull the trigger because of inflation risks, which are dominated by high food prices.
Gross domestic product likely grew 6.8% last quarter from a year earlier, a Bloomberg survey of economists shows. That would be the slowest pace in five quarters and lower than the central bank’s projection of 7.1% for the period. The economy grew 7.8% the January-March quarter.
The government is scheduled to release the data at 5:30 p.m. local time on Friday. Here’s a look at some of the key issues that could affect the figures:
Consumer spending remains subdued
Businesses continue to hold back on investment, while consumer sentiment fell for a second consecutive month in July, curbing the outlook for private consumption, which makes up nearly 60% of India’s GDP.
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