According to OPEC’s latest monthly update for October, India’s economy experienced a slight slowdown in the second quarter of 2024, registering a year-on-year growth of 6.7%, down from 7.8% in the first quarter. This deceleration was mainly attributed to a dip in government spending during the election season.
Despite the slowdown, the services sector, which has contributed an average of 54% to the economy since 2021, showed resilience, with growth accelerating to 7.2% in 2Q24, compared to 6.7% in the previous quarter. The report also highlighted a positive trend in the labor market, with the unemployment rate dropping to 7.8% in September, down from 8.5% in August.
OPEC forecasts that India’s economic growth for the full year of 2024 will remain strong at 6.8%, consistent with its previous projections. Government support, renewed spending post-election, and continued consumer spending are expected to drive growth in the second half of the year.
Looking ahead to 2025, the growth rate is projected to decelerate to 6.3%, as the economy stabilizes from its high 2024 baseline. The outlook for India remains positive, with robust growth expected as government expenditure ramps up again following the election-related slowdown in the second quarter.
The report underscores India’s position as a key player in the global economy, with its strong growth prospects supported by both public and private sector activity.
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