GDP stands at 6.7% in first quarter of FY-25, lowest in five consecutive quaters

India's gross domestic product (GDP) growth slowed to 6.7% in the April-June quarter of fiscal year 2024-25 (Q1FY25), reflecting softer government and consumer spending. This marks a decline from the 7.8% growth recorded in the previous January-March quarter, which was driven by strong performance in the manufacturing sector.

Despite the moderation, the Indian economy outperformed expectations with an 8.2% growth rate for the full fiscal year 2023-24 (FY24). Economists predict that the economy will maintain strong momentum throughout the current fiscal year.

The Real GDP for the quarter is estimated to be ₹43.64 lakh crore, compared to ₹40.91 lakh crore in the first quarter of 2023-24, which is a growth rate of 6.7%.

The Reserve Bank of India (RBI) revised its growth forecast for Q1FY25 downwards by 20 basis points to 7.1% in its August monetary policy statement, citing muted government capital expenditure, lower corporate profitability, and decreased core output. However, the central bank maintained its full-year GDP growth estimate for FY25 at 7.2%.

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.