India Q1 FY25 GDP Data Highlights: Indian economy hits 15-month low of 6.7% in June quarter

India Q1 FY25 GDP Data Highlights: India's gross domestic product (GDP) for the April-June quarter of fiscal 2024-25 (Q1FY25) hit a 15-month low of 6.7 per cent compared to 8.2 per cent in the year-ago period over soft government spending and low consumer spending. According to data released by the National Statistical Office (NSO) on Friday, August 30, the agriculture sector recorded a two per cent growth, down from 3.7 per cent in the June quarter.

Despite India's GDP growth hitting a five-quarter low in the first quarter of the current fiscal , India still remains the fastest-growing major economy in the world, as China's GDP growth in the April-June quarter came in at 4.7 per cent.

The expansion in 'financial, real estate and professional services' gross value added (GVA) too slowed to 7.1 per cent from 12.6 per cent in the year-ago quarter. However, the GVA in the manufacturing sector accelerated to seven per cent in the first quarter of the current fiscal compared to five per cent a year ago.

Also Read: India Q1FY25 GDP: Growth hits 15-month low at 6.7% in April-June

The GDP growth came in at 7.8 per cent in the preceding January-March quarter of FY24, driven by strong growth in the manufacturing sector. The Indian economy beat D-Street estimates and grew by 8.2 per cent for the full year (FY24). Economists expect the momentum to remain strong this year.

The Reserve Bank of India (RBI) revised its growth forecast for the April-June quarter downwards by 20 bps to 7.1 percent in its August monetary policy statement, citing muted government capex, lower corporate profitability, and lower core output. However, the central bank retained full-year FY25 GDP growth estimates at 7.2 percent.

RBI Governor Shaktikanta Das said in the latest minutes of the Monetary Policy Committee (MPC) meeting that the pickup of agricultural activity is expected to boost rural consumption further. Private corporate investment is also gaining steam, with capacity utilisation reaching its highest level in 11 years.

‘’This is critical for the ‘last mile of disinflation’ and anchoring inflation expectations. Food inflation may soften due to good monsoons, steady improvement in kharif sowing, rising reservoir levels, and a likely favourable rabi season output,'' said the RBI Governor.

‘’At such a crucial juncture, steady growth impulses allow monetary policy to unambiguously focus on supporting a sustained descent of inflation to the target. The best contribution monetary policy can make for sustainable growth is maintaining price stability,'' added Das.

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India Q1 FY25 GDP Data Highlights: Indian economy hits 15-month low of 6.7% in June quarter

India Q1 FY25 GDP Data Highlights: The Indian economic growth rate moderated to 6.7 per cent in the June quarter on lower consumer spending, lower than RBI's forecast of 7.1 per cent.