A wake-up call: On the growth forecast
Even the most pessimistic economic forecasters did not anticipate the sharp downturn in economic momentum reflected in the Gross Domestic Product (GDP) estimates for the July-September quarter. From a five-quarter low of 6.7% in the first quarter (Q1), most independent economists expected GDP growth of 6.5% in Q2, citing slackening urban demand indicators such as moderating GST revenue growth, and weak consumer durables’ and non-durables’ sales. The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), in its October review, pegged Q2 growth at 7%, while RBI officials projected a 6.8% uptick in an article soon after. That the actual number came in at just 5.4% — the slowest since the third quarter of 2022-23 — with the Gross Value-Added (GVA) in the economy rising at a margin...