India’s GDP growth decelerated to 5.4% YoY in Q2 FY25, marking its slowest pace in seven quarters and falling well short of JP Morgan’s 6.4% estimate. Core GVA growth, which excludes agriculture and public administration, also slowed to 5.3%, highlighting softness in private sector activity. Manufacturing grew at 2.2%, while mining contracted by -0.1%, reflecting industrial headwinds.
JP Morgan believes the RBI may announce liquidity-easing measures, such as a CRR cut, at its upcoming policy meeting to counter tightening liquidity. The brokerage highlighted that while the slowdown was sharper than expected, the trajectory aligns with recent trends. It maintained its expectation of a rate cut in February but noted that the downside surprise in GDP data has increased the odds of a rate cut sooner.
