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Q2 GDP growth has unexpectedly plummeted to 5.4%, raising doubts about the finance ministry's full-year estimate of 6.5-7%. This slowdown, attributed to demand deficits and external factors, may prompt a rate cut by the Monetary Policy Committee, despite rising retail inflation at 6.2%. The RBI's tightening of unsecured credit is further complicating the economic outlook, as inflation pressures threaten consumption and corporate investment.
India's GDP growth slowed to 5.4% in Q2 FY25, the lowest in seven quarters and below the 6.5% forecast, raising concerns about economic momentum. Despite this, the BSE Sensex and NSE Nifty rose nearly 1% on November 29, driven by gains in pharma, auto, and IT sectors, with investors now eyeing potential interest rate cuts from the Reserve Bank of India.
India's GDP growth fell to 5.4% in Q2 FY25, marking the lowest rate in seven quarters, down from 6.7% in the previous quarter and 8.1% a year earlier. This figure was significantly below the median forecast of 6.5% from a poll of economists, who expect growth to reach 6.8% for FY25, lower than the RBI's 7.2% prediction.
The RBI is closely monitoring the microloan market following its crackdown on the unsecured personal loan sector in November 2023. Recent developments have led to a temporary shift in the banking system's liquidity, pushing it into a deficit mode. Investors should stay alert to these evolving trends ahead of the MPC meeting in December.
Stress is mounting on microlenders, with Q2 marking the second consecutive quarter of disappointing earnings. Following the RBI's crackdown on unsecured lending growth, signs of strain are becoming evident in microlenders' financials, highlighting the impact of regulatory measures introduced in 2022.
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gdp growth plummets raising concerns over economic outlook and rate cuts
05:27 30.11.2024
gdp slowdown concerns overshadow market gains as sensex and nifty rise
13:52 29.11.2024
India's GDP growth falls to seven-quarter low at 5.4 percent in Q2
11:43 29.11.2024
RBI monitors microloan market amid liquidity concerns ahead of MPC meeting
10:46 29.11.2024
microlenders face stress as regulatory measures impact unsecured lending growth
05:23 29.11.2024
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