RBI Predicts 6.8% GDP Growth for Q2FY25 Amid Mixed Economic Signals

The Reserve Bank of India (RBI) has projected a 6.8% GDP growth for the second quarter of FY25, slightly up from the 6.7% growth in the previous quarter. Despite this improvement, the Indian economy has faced a slowdown due to factors like heavy rainfall and the observance of Pitru Paksha, impacting several key sectors.

Key Takeaways:

Economic Slowdown: Indicators such as GST collections, bank credit growth, merchandise exports, and the manufacturing PMI have shown signs of moderation.

Positive Outlook: Despite these concerns, improving consumer sentiment, industry optimism, and the upcoming festival season are expected to boost consumption and private investment.

Inflation Concerns: Inflation rose to 5.5% in September, driven by food prices and higher import duties on edible oil, with a risk of further escalation due to geopolitical tensions in the Middle East.

The RBI remains cautiously optimistic, with signs of improving manufacturing capacity and potential economic strengthening in upcoming quarters.

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