GDP growth slows to 6-year low at 5% in April-June from 8% a year ago; agriculture, manufacturing sectors show dismal performance

Continuing on its downward slide, the economic growth in the first quarter of FY20 slowed to 5 percent in April-June in a multi-year low. The previous low was recorded at 4.3 percent in January-March 2012-13. The economic growth was 8 percent in the same quarter of 2018-19.

India’s economic growth dropped to 5 percent in the April-June quarter of 2019-20 due to a sharp deceleration in the manufacturing sector and sluggish agriculture output, according to official data released on Friday.

#BREAKING | Quarter 1 GDP growth at 5%. https://t.co/RVzic6tRoM

— News18 (@CNNnews18) August 30, 2019

Economists in a Reuters poll had expected GDP to grow at 5.7 percent in the June quarter.

The Reserve Bank had marginally lowered the GDP growth projection for 2019-20 to 6.9 percent from 7 percent projected earlier in the June policy, and underlined the need for addressing growth concerns by boosting aggregate demand.

“Real GDP growth for 2019-20 is revised downwards from 7 per cent in the June policy to 6.9 per cent - in the range of 5.8-6.6 per cent for firs half of 2019-20 and 7.3-7.5 per cent for the second half - with risks somewhat tilted to the downside,” RBI had said in the monetary policy statement.

GDP at Constant (2011-12) Prices in Q1 of 2019-20 is estimated at Rs 35.85 lakh crore, as against Rs 34.14 lakh crore in Q1 of 2018-19, showing a growth rate of 5.0 percent.

Quarterly GVA at Basic Price at Constant (2011-12) Prices for Q1 of 2019-20 is estimated at Rs 33.48 lakh crore, as against Rs 31.90 lakh crore in Q1 of 2018-19, showing a growth rate of 4.9 percent over the corresponding quarter of previous year.

The economic activities which registered growth of over 7 percent in Q1 of 2019-20 over Q1 of 2018-19 are ‘Electricity, Gas, Water Supply & Other Utility Services’, ‘Trade, Hotels, Transport, Communication and Services Related to Broadcasting’ and ‘Public Administration, Defence and Other Services’.

The growth in the ‘Agriculture, Forestry and Fishing’, ‘Mining and Quarrying’, ‘Manufacturing’, ‘Construction’ and ‘Financial, Real Estate and Professional Services’ is estimated to be 2.0 percent, 2.7 percent, 0.6 percent, 5.7 percent, and 5.9 percent, respectively, during this period.

China’s economic growth was 6.2 percent in April-June quarter of 2019, which was the weakest expansion in 27 years.

--With PTI inputs