Modi govt says Q2 GDP slowdown ‘a temporary blip’, growth figures will improve in next quarters

Union Finance Minister Nirmala Sitharaman on Tuesday (December 17) acknowledged that the economic growth was “slower than expected” in the July-September quarter (Q2).

Speaking in the Lok Sabha, Sitharaman at the same time said that the government expects the growth to pick up soon.

“The real GDP growth in Q2 has been slower than expected. Q2 has been a challenging time for India and most countries across the world. Government believes that the Q2 GDP growth slowdown is a temporary blip, and we will see an improvement in coming quarters,” said Sitharaman, according to Moneycontrol.

In the July-September quarter, the economic growth slowed to a two-year low of 5.4 per cent. In the previous April-June quarter, the economic growth was 6.7 per cent. In the July-September quarter the previous year, the economic growth was 8.1 per cent.

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The low economic growth was credited to poor performance in manufacturing and mining sectors accompanied by weak consumption.

Sitharaman went on to say that she remains “optimistic about an improvement in economic performance going ahead”.

Sitharaman also defended the Narendra Modi government’s (2014-) record on inflation as compared to the previous Congress-led government’s record (2004-14).

“The Centre is committed to better managing food inflation where volatility in certain food items is weather driven…Inflation has been better controlled under NDA regimes. Inflation was brought back to 5.1 per cent during 2014-2024. Inflation touched double digits during UPA times,” said Sitharaman.

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After hitting a 14-month high of 6.21 per cent in October, the retail inflation eased to 5.48 per cent in November, primarily because of the easing of food prices, particularly the prices of vegetables. The food inflation reduced to 9.04 per cent from 10.87 per cent the previous month. The government prefers to have the inflation in the 2-6 per cent range.