The second quarter GDP data will be released next week, but economists estimate growth to have moderated sequentially to 7 per cent in the quarter ending September from 7.8 per cent in the first quarter.

“A normalising base and an erratic monsoon are expected to result in a sequential moderation in the GDP growth to 7 per cent in the second quarter of 2023-24 from 7.8 per cent in the first quarter," Aditi Nayar, chief economist, Icra, said.

"Regardless, we anticipate that the GDP expansion in this quarter will exceed the Monetary Policy Committee’s (MPC’s) October 2023 projection of 6.5 per cent,” she said.

“Looking ahead, uneven rainfall, narrowing differentials with year-ago commodity prices, the possible slowdown in momentum of government capex as we approach the parliamentary elections, weak external demand and the cumulative impact of monetary tightening are likely to translate into lower GDP growth in the second half of 2023-24."

"As a result, we maintain our 2023-24 GDP growth estimate at 6 per cent, lower than the MPC’s projection of 6.5 per cent for the fiscal,” she added.

Adding to the gloomy prospects, Motilal Oswal in a research report said rural spending contracted in the second quarter.

An average of 10 proxy indicators suggests rural spending declined for the first time in eight quarters at the rate of 0.5 per cent year-on-year.