India’s Q2 GDP growth saw a temporary slowdown due to seasonal monsoon effects and election-related factors. However, industry experts expect a sharp rebound in the January-March quarter (Q4) of FY25, signaling renewed economic vigor.

For equity markets, this data is unlikely to have a significant impact.

“Any short-term dip in market sentiment could present an opportunity for investors with surplus funds to build long-term positions, given the underlying strength in key consumption and service sectors,” said Dr Vikas Gupta, CEO and Chief Investment Strategist, OmniScience Capital.

Private consumption surged by 6% in Q2 FY25, a significant leap from the 2.6% growth recorded in the same period last year. This robust performance dispels concerns about slowing domestic demand. Government consumption also improved quarter-on-quarter but remained lower than the same period last year, reflecting cautious pre-election spending.

The agriculture sector demonstrated strong growth of 3.5% in Q2 FY25, up from 1.7% in Q2 FY24, aided by favorable monsoon conditions and higher kharif output. Meanwhile, the tertiary sector emerged as a key highlight, growing by 7.1%, underscoring the resilience of consumption-driven sectors.

“This dispels recent concerns about weakness in private consumption. Government consumption improved from the previous quarter but was lower compared to the same period last year, likely reflecting cautious spending ahead of elections,” said Gupta.

The primary sector showed stability with marginal GVA growth, although mining was impacted by the monsoon.

“A sharp rebound in H2 FY25 is expected, driven by government and private capex, robust agriculture growth, and buoyant consumption demand, with GDP growth projected at 6.6-6.8% for FY25,” Prabhakar said.

The real estate demand has remained stable, as indicated by high-frequency indicators. Both buyer appetite and developer sentiment towards the real estate market continue to be steady.

(IANS)