OPEC says Indian economy projected to normalize its growth pattern following slowdown in 3Q24

OPEC stated in a latest monthly update that the Indian economy is projected to normalize its growth pattern following the slowdown in 3Q24. The manufacturing sector is expected to return to growth, supported by government policies outlined in the Union Budget released in July. Key sectors such as pharmaceuticals and high-tech manufacturing are expected to continue showing strong growth rates into 2025. Agriculture is expected to rebound and accelerate after the monsoon season, which saw 6% more rainfall than the historical average. Services are likely to remain the primary driver of the Indian economy, with growth consistently around 7%, y-o-y, as seen in 2Q24 and 3Q24, providing a strong foundation for sustained economic growth. Government initiatives to further formalize the economy are expected to strengthen this trend. Additionally, proposed government reforms to streamline and unify the insurance sector, including increasing the FDI limit from 74% to 100%, aim to drive growth in financial services and expand opportunities in the sector. India's economic growth slowed to 5.4%, y-o-y, in 3Q24, down from 6.7%, y-o-y, in 2Q24, and 7.8%, y-o-y, in 1Q24. The sharpest contractions were observed in the mining sector, which declined by 0.1%, y-o-y, in 3Q24 compared to growth of 7.2%, y-o-y, in 2Q24, and in the manufacturing sector, which slowed to 2.2%, y-o-y, in 3Q24 from 7.0%, y-o-y, in 2Q24.

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