By Kimberley Kao

India's economy slowed more than expected in the most recent quarter, as delayed infrastructure spending and soft manufacturing activity weighed.

The world's fifth-largest economy grew 5.4% from a year earlier in the July-September quarter, provisional figures issued by the Ministry of Statistics and Program Implementation showed Friday. That was the slowest pace of growth since the fourth quarter of 2022.

The print was lower than the previous quarter's 6.7% expansion, and missed the median estimate for 6.4% growth compiled in a Wall Street Journal poll of economists. Friday's reading also missed the 6.7% growth projected by the Reserve Bank of India in November.

Economist had largely expected the data to show that the economy had lost some speed in the latest quarter, mainly due to soft manufacturing and investment activity, and weak urban consumption. But the cooler pace of expansion is unlikely to significantly alter views on the long-term trajectory for the South Asian economy, which remains one of the fastest-growing in the region.

The Indian economy continues to grow at a healthy pace despite challenging global conditions, the World Bank said in a September development update for the country. Though it expects growth to slow from a very strong prior fiscal year, economic expansion should stay strong in the following two fiscal years.

Moody's Analytics economists in a note said they expect growth to pick up in the December quarter as momentum builds in manufacturing and agriculture.

Friday's data showed that manufacturing activity stumbled in the July-September period from the preceding quarter, with growth slowing to 2.2% from 7.0%. Construction sector momentum also slowed, while the mining & quarrying sector tipped into contraction.

Agriculture was a brighter spot, expanding more rapidly in the July-September quarter.

Private consumption meanwhile slid to 6.0% from 7.4%, but government spending pulled out of negative territory to grow 4.4% during the quarter.

The central bank had previously projected real gross domestic product growth of 7.2% for the fiscal year ending March 2025. That would compare with 8.2% in the prior year.


Write to Kimberley Kao at kimberley.kao@wsj.com


(END) Dow Jones Newswires

11-29-24 0637ET