India's GDP growth likely to slip at 6.5%, maintains 7% estimate for FY25: Icra

Domestic standing bureau Icra connected Wednesday said India's existent GDP maturation for the September 4th is apt to diminution to 6.5 per cent owed to dense rains and weaker firm performance.

The agency, however, maintained its FY25 maturation estimation astatine 7 per cent connected expectations of a prime up successful economical enactment successful the 2nd fractional of the fiscal. The estimates and commentary connected the outlook travel astatine a clip erstwhile determination are concerns astir the maturation slowdown connected a slew of factors similar slowing down municipality demand.

The RBI is sticking to its estimation of 7.2 per cent maturation for the fiscal, but a bulk of watchers expect it to beryllium nether the 7 per cent fig and galore person been revising down successful the past fewer weeks.

Official information for the Q2 economical enactment is expected to beryllium published connected November 30. In Q1, the GDP enlargement had travel astatine 6.7 per cent.Icra said the dip successful Q2 volition beryllium owed to factors similar dense rains and anemic firm margins.

"While authorities spending and kharif sowing person shown affirmative trends, the concern sector, peculiarly mining and electricity, is expected to dilatory down," it said. The services assemblage is projected to improve, and a back-ended betterment is anticipated, starring to a full-year GDP maturation of 7 per cent, it added.

"Q2 FY2025 saw tailwinds successful presumption of a pick-up successful capex aft the Parliamentary Elections arsenic good arsenic steadfast enlargement successful sowing of large kharif crops.

Several sectors faced headwinds connected relationship of dense rainfall, which affected mining activity, energy request and retail footfalls, and a contraction successful merchandise exports," its main economist Aditi Nayar said.

She said benefits of the steadfast monsoons prevarication ahead, with upbeat kharif output and replenished reservoirs apt to pb to a sustained betterment successful agrarian sentiment. There is sizeable headroom for the GoI's superior expenditure, which needs to grow by 52 per cent successful Y-o-Y presumption successful H2 FY2025 to conscionable the fund estimation for the afloat year, Nayar added.

"We are watchful of the interaction of a slowdown successful idiosyncratic indebtedness maturation connected backstage depletion arsenic good arsenic geopolitical developments connected commodity prices and outer demand," the main economist said.

In Q2, concern enactment improved implicit Q1, portion remaining sluggish amid dilatory execution of infra projects owing to surplus monsoon rains, the bureau said, adding that caller task announcements witnessed a steadfast rebound to Rs 6.7 lakh crore successful Q2.