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.
