India's gross domestic product (GDP) slipped to a 15-month low of 6.7 per cent on an annual basis in the April-June quarter of the current financial year, the government data showed on Friday.
India's primary sector comprising agriculture and mining industries witnessed a dip at 2.7 per cent on an annual basis as against 4.2 per cent in the corresponding period of FY24.
In a significant low, agriculture slowed to 2.0 per cent in the first quarter of FY25 on an annual basis. The sector had grown at 3.7 per cent in FY24.
Better monsoon conditions could push the agriculture sector into a better direction, the government said.
"Monsoon progress brightens agriculture outlook," V Anantha Nageswaran, the government of India's Chief economic advisor said.
Further, the secondary sector consisting of manufacturing and electricity industries recorded a significant growth of 8.4 per cent on an annual basis. The growth rate for India's secondary sector had stood at 5.9 per cent in the same period of the last fiscal.
Manufacturing witnessed an accelaration in growth at 7.0 per cent for the first quarter of the current fiscal year on an annual basis. The manufacturing industry had recorded a growth of 5.0 per cent in FY24.
The tertiary sector slipped to 7.2 per cent annually, when compared to its growth of 10.7 per cent in FY24.
Growth for trade, hotels, transport, communications and services related to broadcasting slowed at 5.7 per cent on an annual basis, down from 9.7 per cent in FY24.
Meanwhile, financial, real estate and professional services came down from 12.6 per cent in FY23 to 7.1 per cent in the first quarter of FY25, year on year.
Public administration and defence, however, recorded a growth of 9.5 per cent in Q1FY24 on an annual basis against 8.3 per cent in FY24.
"India was the fastest-growing major economy in the June quarter. Data shows better alignment between demand and supply sides of the economy in the June quarter," said Chief economic advisor V Anantha Nageswaran.
The Chief economic advisor stated that private consumption and investment have pushed the Q1 numbers. GDP and GVA are moving forward, and heading towards their trend growth rates, Nageswaran explained.
The data for April-June quarter holds significance as the evaluation comes after Prime Minister Narendra Modi secured a third term to form government at the Centre in May.
Experts were anticipating a moderate growth for this quarter, attributing their expectations to the general elections, a slump in urban consumption and a reviving rural consumption.
The Reserve Bank of India (RBI) had in August, during the last Monetary Policy Committee meeting, projected India's GDP to grow at 7.1 per cent in the Q1FY25.
Meanwhile, an ET poll of 14 economists had projected the GDP to grow at 6.85 per cent.
fter this soft start, we expect growth to gain ground for the rest of the year, taking the full year average to 7% in FY25,” said Radhika Rao, senior economist, DBS Bank.
Govt optimistic about growth
The Indian economy retained its growth momentum in Q1FY25, stated the Union Finance Ministry's monthly economic review released on August 22.
India's key economic indicators present a positive outlook, underpinned by robust domestic activity, improving external trade, and ..
Solid growth, moderating inflation
In a recent report, Moody's remained optimistic about India's economic growth in financial years 2025 and 2026. The credit rating agency anticipated India's GDP to grow at 7.2 per cent in financial year 2025, and 6.6 per cent for FY26.
"From a macroeconomic perspective, the Indian economy is in a sweet spot, with the mix of solid growth and moderating inflation," the Moody's report read.
Finch expected India's strong medium-term growth and robust external finances as key factors that would help drive the economy.
The rating agency's forecast indicated a GDP growth of 7.2% for FY25 and 6.5% for FY26, with public infrastructure driving this growth despite potential job creation concerns.
Source Name : Economic Times