GDP Growth Rate at 6.7% in the First Quarter

UV INDIA NEWS: Due to reduced government spending due to elections and the lack of better agricultural performance, India's GDP growth rate for the first quarter of the 2024-25 fiscal year was 6.7%, slightly below the RBI's expectation. This marks the lowest growth rate in the past 15 months. Despite an estimated 7.1% growth rate, the 6.7% rate is still impressive, making India one of the fastest-growing major economies in the world for this quarter.

Key Insights:

- The overall GDP for the first quarter was ₹43,63,732 crore, up from ₹40,91,484 crore in the same period last year.

- The Chief Economic Advisor anticipates a 7.1% growth for the year based on positive trends in agriculture and manufacturing, spurred by favourable monsoon conditions and increased rural spending.

Sector-Wise Growth Rate:

- Agriculture, Forestry, Fishing: 2.7%

- Mining and Quarrying: 7.0%

- Manufacturing: 4.7%

- Electricity, Gas, Water Supply, and Utility Services: 10.4%

- Construction: 10.5%

- Trade, Hotels, Transport, Communication: 7.2%

- Financial, Real Estate, and Professional Services: 7.1%

- Public Administration, Defence, and Other Services: 9.5%

Global and Domestic Industry Insights:

- Globally, industry growth in July remained stable at 6.1%, supported by natural gas production.

- In the financial year 2023-24, India's expected annual growth rate remains robust at 8.2%.

 

Despite slower government spending and a minor contraction in manufacturing, growth across various sectors, particularly in construction and utility services, contributed to sustaining the overall growth momentum. Economists suggest that while the 6.7% growth rate in the first quarter might appear concerning, it is expected to pick up pace with improving economic activities and strategic government interventions in the coming quarters.