In its latest monthly update for October, Organization of the Petroleum Exporting Countries (OPEC) has noted a slight slowdown in the Indian economy, with growth registering at 6.7% year-over-year (y-o-y) in the second quarter of 2024, down from 7.8% y-o-y in the first quarter. This deceleration has been attributed mainly to a decrease in government expenditure during the election season.
Despite this slowdown, the services sector showed resilience, accelerating growth to 7.2% y-o-y in 2Q24, up from 6.7% y-o-y in the previous quarter. Additionally, the unemployment rate improved, declining to 7.8% in September from 8.5% in August.
OPEC's forecast indicates that with continued government support and increased consumer spending, India's growth rate for 2024 is projected to be 6.8% y-o-y, consistent with last month's predictions. Looking ahead to 2025, growth is expected to moderate to 6.3% y-o-y, also aligning with earlier forecasts.
As government spending is anticipated to resume in the second half of 2024 following the election-related slowdown, India's robust economic growth is expected to continue.
