India's Q1 GDP Growth Rate Slows To Five-Quarter Low Of 6.7%; GVA Grows By 6.8%

India's gross domestic product grew at the slowest pace in five quarters, even as GVA growth saw a pickup.

The gross domestic product grew 6.7% in the April-June quarter, lower than 7.8% in the January-March 2024 quarter and 8.2% in the year-ago period, according to the latest estimates released by the government's statistical office on Friday. Gross value added, which strips out indirect tax and subsidies, is estimated to have grown 6.8% as compared with 6.3% in the preceding quarter.

GDP was estimated to grow 6.8% in the first quarter, according to economists polled by Bloomberg. GVA growth was pegged at 6.5%.

Chief economic advisor Anantha Nageswaran said that GDP growth coming in at a five-quarter low was also because of a strong base, especially in services. India's growth prospects remain intact, with average growth forecasts averaging 7% for the full year, he said.

“The gap between GVA and GDP growth has narrowed significantly due to higher subsidies payouts in the first quarter of the year, explained Suman Chowdhury, Executive Director and Chief Economist, Acuité Ratings & Research. At 6.8% on an annual basis, GVA growth is 50 basis points higher than what had been reported in Q4FY24 and is clearly a confirmation of the continuing momentum in the general economic activity," he added.

Medium-term growth is expected to range between 6.5 and 7%. 7% plus growth can be achieved if structural reforms are undertaken, the CEA said.

• Agriculture grew 2% in Q1 as compared with 0.6% in Q4FY24.

• Mining grew 7.2%, up from 4.3% in the previous quarter.

• Manufacturing expanded 7% as against 8.9% in the prior quarter.

• Electricity and other public utilities expanded 10.4% versus 7.7%.

• Construction grew 10.5% as compared with 8.7% in Q4.

• Trade, hotels, transport, and communication expanded 5.7% versus 5.1%.

• The financial services sector grew 7.1% as against 7.6%.

• The public administration segment grew 9.5% as compared with 7.8% in Q4.

• Private final consumption expenditure grew by 7.4% in Q1 FY25.

• Government final consumption expenditure contracted by -0.2%

• Gross fixed capital formation grew by 7.5%.