GDP falls further to 5.7% in Q1 as growth pangs continue; manufacturing up just 1.2%

The country’s economic growth continued to suffer in the Arpil-June quarter as the GDP slowed down further to a 13-quarter-low of 5.7 percent from 6.1 percent in the previous quarter, data released by the government showed. The de-stocking ahead of the goods and services tax rollout on 1 July and the continuing impact of note ban are likely to have contributed to the decline.

In the year-ago period, the GDP had grown 7.9 percent.

The print has also come in as a major disappointment as there was wide expectation that the growth will be better than the previous quarter’s.

“The number is quiet disappointing,” said economist Pronab Sen in an interview to the TV channel. He said the manufacturing sector growth of 1.2 percent against 5.3 percent in the fourth quarter of 2016-17 is a shocker and attributed it to the continuing negative impact of demonetisation.

According to the government release, the gross value added at basic price at constant prices during the qaurter grew 5.6 percent on year.

The sectors that registered growth of over 7 percent during the quarter are ’trade, hotels, transport & communication and services related to broadcasting’, ‘public administration, defence and other services’ and ‘electricity, gas, water supply & other utility services’.

The agriculture, forestry and fishing sector grew 2.3 percent, mining and quarrying (-)0.7 percent, construction 2 percent and financial, insurance, real estate and professional services 6.4 percent.

Data by Kishor Kadam