India's Gross Domestic Product (GDP) moderated to 6.7% during the first quarter of the financial year 2024-25, compared to the 8.2% growth seen in the same quarter of the previous year.
New Delhi : The country's GDP growth slowed to 6.7 percent during the first quarter of the financial year 2024-25, marking the lowest rate in the past 15 months or five quarters. This is a significant drop from the 8.2 percent growth observed in the same quarter of the previous financial year. According to official data released by the Indian government on Friday.
In comparison, India's economic growth rate in the last quarter of the previous fiscal year (January-March 2024) was 7.8 percent. The deceleration has been attributed to reduced government spending ahead of the upcoming Lok Sabha elections, which had temporarily bolstered growth. However, this momentum has reversed in the current quarter.
A Reuters poll conducted three days prior to the data release predicted this downturn, suggesting that the country's economic growth would likely be the slowest in a year for the April-June quarter, primarily due to lower government expenditure amidst the election period. The survey, which involved 52 economists between August 10 and 26, projected a growth rate ranging from 6.0 percent to 8.1 percent for the first quarter of the current fiscal year.
The slowdown in growth has been partly attributed to the enforcement of the Model Code of Conduct during the Lok Sabha elections, which took place in various phases from April 29 to June 1. During this period, numerous government projects were halted, and both central and state government expenditures were reduced. This reduction in spending is seen as a significant factor contributing to the lower growth rate.
Additionally, adverse weather conditions, particularly the heat wave, are believed to have impacted agricultural production, further affecting overall growth. On the other hand, industrial production saw an increase, providing some relief.
Despite the current slowdown, economists remain cautiously optimistic. They have suggested that while the growth rate might dip in the first quarter, it is expected to recover, with the annual growth rate projected to hover around 7 percent by the end of the fiscal year. If this forecast holds true, India will achieve a growth rate of 7 percent or higher for the fourth consecutive year, signaling resilience in the country's economic trajectory.
New Delhi : The country's GDP growth slowed to 6.7 percent during the first quarter of the financial year 2024-25, marking the lowest rate in the past 15 months or five quarters. This is a significant drop from the 8.2 percent growth observed in the same quarter of the previous financial year. According to official data released by the Indian government on Friday.
In comparison, India's economic growth rate in the last quarter of the previous fiscal year (January-March 2024) was 7.8 percent. The deceleration has been attributed to reduced government spending ahead of the upcoming Lok Sabha elections, which had temporarily bolstered growth. However, this momentum has reversed in the current quarter.
A Reuters poll conducted three days prior to the data release predicted this downturn, suggesting that the country's economic growth would likely be the slowest in a year for the April-June quarter, primarily due to lower government expenditure amidst the election period. The survey, which involved 52 economists between August 10 and 26, projected a growth rate ranging from 6.0 percent to 8.1 percent for the first quarter of the current fiscal year.
The slowdown in growth has been partly attributed to the enforcement of the Model Code of Conduct during the Lok Sabha elections, which took place in various phases from April 29 to June 1. During this period, numerous government projects were halted, and both central and state government expenditures were reduced. This reduction in spending is seen as a significant factor contributing to the lower growth rate.
Additionally, adverse weather conditions, particularly the heat wave, are believed to have impacted agricultural production, further affecting overall growth. On the other hand, industrial production saw an increase, providing some relief.
Despite the current slowdown, economists remain cautiously optimistic. They have suggested that while the growth rate might dip in the first quarter, it is expected to recover, with the annual growth rate projected to hover around 7 percent by the end of the fiscal year. If this forecast holds true, India will achieve a growth rate of 7 percent or higher for the fourth consecutive year, signaling resilience in the country's economic trajectory.
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