GDP growth slows to five-quarter low of 6.6% in Q3 on weak performance of agriculture and manufacturing sector

India’s economic growth slowed to a 5-quarter low of 6.6 percent in the October-December period of this fiscal, according to government data released on Thursday. The Gross Domestic Product (GDP) at constant prices (2011-12) had grown at 7.7 per cent in the October-December quarter of the previous financial year. Also, growth estimate has been lowered to 7 percent for 2018-19 from 7.2 percent released earlier, said Central Statistics Office. Gross Value Added (GVA) for the third quarter has been estimated to grow at 6.3 percent as against 6.8 percent in the second quarter of the current fiscal and 7.3 percent in the corresponding quarter of the previous year. [caption id=“attachment_4044261” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] “GDP at Constant (2011-12) Prices in Q3 of 2018-19 is estimated at Rs 35.00 lakh crore, as against Rs 32.85 lakh crore in Q3 of 2017-18, showing a growth rate of 6.6 percent. “GDP growth rates for Q1 and Q2 of 2018-19 at Constant Prices are 8.0 percent and 7.0 percent respectively,” the Central Statistics Office (CSO) said in a statement. Earlier last month, the CSO had estimated GDP growth of 7.2 percent for this fiscal under its first advance estimates. The agriculture sector is estimated to grow at 2.7 percent in the third quarter as against 4.2 percent in the second quarter and 4.6 percent of Q3 FY2018. Manufacturing growth is estimated to slow to 6.7 percent in the third quarter against 6.9 percent in the second quarter and 8.6 percent of Q3 FY2018. The construction sector is expected to grow at 9.6 percent in the third quarter compared to 8.5 percent in the second quarter and 8 percent in the corresponding quarter previous year.

The median forecast from more than 55 economists polled by Reuters on 19-25 February was for growth of 6.9 percent, compared with 7.1 percent in July-September. “Consumption drivers should remain modest as tight liquidity persisted through most of the quarter and farm distress restrained rural consumption,” Charu Chanana, emerging Asia economist at Continuum Economics had said. A slowdown in growth momentum supports the Reserve Bank of India’s sudden dovish turn in early February when it cut rates and changed its policy stance to “neutral” to boost expansion after a sharp fall in inflation. However, global uncertainty over trade conflicts, Brexit and oil prices could add to growth headwinds in India, the RBI’s Monetary Policy Committee had said. With inputs from agencies