GDP growth accelerates in Q1; highest in over two years

Marcus Newton
September 1, 2018

The latest period's annual pace beat a Reuters poll forecast of 7.6 percent, and was the highest since India logged 9.3 percent growth in the January-March quarter of 2016.

In the fourth quarter of 2017-18, GDP growth was at 7.7%.

Sectors which registerd growth of over 7 per cent include "manufacturing, "electricity, gas, water supply & other utility services" "construction" and 'public administration, defence and other services".

The country's economic growth soared to an over two-year high in April-June quarter, powered by solid expansion in manufacturing, the farm sector and gathering strength in consumer spending, bolstering the government's reforms record.

GDP at current prices in Q1 of 2018-19 is estimated at Rs 44.33 lakh crore, as against Rs 38.97 lakh crore in Q1 of 2017-18, showing a growth rate of 13.8 percent. "GVA at Basic Price at current prices in Q1 of 2018-19, is estimated at Rs 41.02 lakh crore, as against Rs 36.34 lakh crore in Q1, 2017-18, showing an increase of 12.9 per cent", said the Ministry's statement.

The manufacturing and construction sectors were among those that grew at more than 7% during the quarter, the government said. "We should grow at a robust and steady state in 2018-19, remaining the fastest-growing economy in the world", he said.

The GDP growth indicates that households are buying more.

Agriculture and allied activities also registered an impressive 5.3 per cent growth rate in Q1FY19, up from 4.5 per cent in Q4FY18, on the back of a surge in production.

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Quarterly growth fell as low as 5.6 percent in mid-2017 as the economy reeled from a shock cash ban that scrapped 86 percent of currency notes.

Ashima Goyal, member of Prime Minister's Economic Advisory Council PMEAC said, "8 percent gross value added (GVA), 8.2 percent gross domestic product (GDP) is really good, but we must remember that it is on a low base last quarter".

ALSO READ: GDP growth touches 8.2% in Q1FY19; July core sector growth at 6.6%.

Subhash Garg, the economic affairs secretary, told reporters the government will stick to the fiscal deficit target of 3.3 percent of GDP this fiscal year.

Workers assemble tricycles inside a manufacturing unit in Ahmedabad, India, August 30, 2018.

"Some concerns linger on the sustainability of growth of around 8 per cent in the remaining quarters of FY2019, given the base effect, risks posed by higher crude oil prices, interest costs and a weakening rupee, as well as fiscal constraints", said Aditi Nayar, principal economist at ICRA.

"India's GDP for the first quarter this year growing at 8.2% in otherwise an environment of global turmoil represents the potential of New India".

Other reports by MaliBehiribAe

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