In its October monthly report, OPEC noted that India’s economic growth eased slightly to 6.7% year-on-year in the second quarter of 2024, down from 7.8% in the first quarter. This deceleration was mainly caused by a reduction in government spending during the election period. The services sector, which has made up an average of 54% of India’s economy since 2021, showed improved growth, accelerating to 7.2% year-on-year in the second quarter, compared to 6.7% in the first quarter. Additionally, the unemployment rate fell to 7.8% in September, down from 8.5% in August.
Despite the temporary slowdown, OPEC maintained its projection that India’s economy would grow by 6.8% year-on-year in 2024, consistent with its previous forecast. In 2025, the growth rate is expected to decelerate to 6.3% as it adjusts from the high base of 2024, aligning with last month’s prediction. India’s strong economic growth is anticipated to continue into the second half of 2024 as government expenditure resumes after the election-related cutbacks earlier in the year.
