Sustaining growth will require a deeper commitment from all economic stakeholders as new uncertainties, mostly driven by global factors, have emerged. According to a report by the finance ministry released on Thursday, India’s economy faces a series of challenges that need coordinated efforts from various sectors to maintain growth momentum. The report emphasizes that these uncertainties, which stem from external economic factors such as global inflation, geopolitical tensions, and changes in international trade dynamics, have the potential to disrupt India’s economic progress.

India’s GDP growth recorded a moderation to 5.4% for the second quarter ending September 2024, signaling a slowdown from the previous quarters. This marks a shift in the growth trajectory, reflecting the impact of both domestic and global challenges. Despite this slowdown, there are signs of optimism for the future. The report highlights that, while the moderation in Q2 of FY25 is concerning, the outlook for the third quarter appears much brighter, as indicated by the positive performance of High Frequency Indicators (HFIs) in October.

The report also points to several factors that could contribute to a stronger performance in the second half (H2) of FY25. It suggests that while there are positive signs, it is important to consider the possibility that structural factors, which could include long-term economic adjustments or shifts in the workforce, may have played a role in the slowdown during the first half (H1). Therefore, addressing these structural factors is seen as crucial for ensuring that the recovery is sustainable and not merely a short-term bounce-back.

Furthermore, the finance ministry stresses the need for a more robust and proactive approach from all economic stakeholders, including businesses, policymakers, and international partners, to navigate these emerging challenges. The government is expected to continue its efforts to implement structural reforms and boost investment to create a more resilient economic environment. While the outlook remains cautiously optimistic, the report underscores that the road to sustained growth will require continuous effort and vigilance to overcome the uncertainties of the global landscape.

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