India’s Q2 FY25 GDP grew at 5.4% YoY, the weakest in seven quarters, significantly missing Goldman Sachs’ estimate of 6.5%. Agriculture posted a growth of 3.5%, while manufacturing decelerated to 2.2%, and mining contracted by -0.1%. The broad-based weakness reflects challenges in domestic demand and a decline in private capex.
Goldman Sachs has lowered its FY25 GDP growth forecast to 6% from 6.4%, attributing the downgrade to sustained softness in industrial activity and slowing investments. The firm expects structural recovery in growth to stabilize around 6.3% in FY26, aided by fiscal measures and liquidity support. Goldman highlighted the importance of targeted fiscal initiatives to address sectoral imbalances and accelerate the recovery process.
