The slowdown is largely attributed to a poor performance in the agriculture sector, which grew by just 2%...
Digital Desk: India's GDP growth for the April-June quarter of the fiscal year 2024-25 has slowed to 6.7%, marking the lowest quarterly growth in a year and a quarter, according to government data. This compares to a robust 8.2% in the same period last year. The slowdown is largely attributed to a poor performance in the agriculture sector, which grew by just 2% compared to 3.7% in the previous year.
Despite this dip, India continues to be the fastest-growing major economy, outpacing China's GDP growth of 4.7% for the same period. The previous low for India's GDP growth was 6.2% in January-March 2023.
In contrast to the agriculture sector, the manufacturing sector saw an uptick, with growth accelerating to 7% from 5% in the corresponding period last year. Additionally, the construction segment posted a strong performance with a 10.5% growth, up from 8.6% a year ago. Electricity, gas, water supply, and other utility services also saw significant growth, rising by 10.4% from 3.2%.
However, the expansion in the 'financial, real estate, and professional services sector has decelerated to 7.1% from 12.6% a year ago. The trade, hotels, transport, communication, and broadcasting services segment also experienced a slowdown, growing by 5.7% compared to 9.7% in the previous year.
Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank, noted that while the GDP growth for Q1 FY25 has been softer than anticipated, the Gross Value Added (GVA) remains resilient. She maintains a GDP growth forecast of 6.9% for the fiscal year, supported by rural demand and government spending, although urban demand and private sector investment warrant close observation.
Overall, while India faces challenges in specific sectors, it continues to demonstrate significant economic momentum on the global stage.
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