Download DMI Finance App! Click here

Close

India’s Q2-FY25 Economic Growth Likely to Slow to a Six-Quarter Low; Elevated Inflation Delays Rate Cut Expectations to Q4

  • 27 Nov 2024
  • Post Views: 13

India’s economic growth is expected to have slowed to a six-quarter low of 6.3% YoY in Q2 FY25 due to weaker urban consumption, external demand, and sluggish government spending. A recovery is expected in H2 FY25, supported by rural consumption and government expenditure. Given the expected slower economic growth in Q2, there is a need for counter-cyclical policy support from both fiscal and monetary policies, however, elevated inflation is likely to limit the monetary policy response. We believe the earliest probability for a policy rate cut is at the February meeting, however, we do not rule out further delay should domestic inflation or the global environment deteriorate.