Growth estimates ranged from 6% to 7.5%. The median figure is lower than the RBI’s forecast of 7.1% for the quarter. “Slowdown in manufacturing activity and lower government spending during the election period likely contributed to the slowdown in output growth in the quarter,” said Shreya Sodhani, regional economist at Barclays, which forecast gross domestic product (GDP) growth of 7.1% in the June quarter. The government will release the June quarter growth data on August 30.
The general elections held in the period April-June had an impact government spending.
Rural demand Improving
Rating agency EXECUTION wait GDP growth moderate to a six-quarter low of 6%, with agriculture, forestry and fishing posting a tepid 1% increase.
Last year’s high base effect will have an impact on the figure, he said. Bank of Baroda chief economist Madan Sabnavis.
“We have seen that public spending during the first quarter has been modest, probably due to the elections,” he said. “The other factor is that the manufacturing sector has not shown the kind of take-off that we had previously expected.”
Total government expenditure in the first quarter stood at Rs 9.69 lakh crore, down from Rs 10.5 lakh crore in the year-ago period.
“We expect growth to moderate to 6.7% year-on-year in the first quarter, taking into account the election-related impact, which caused consolidated government spending to slow in the period, along with a patchy start to the rainy season and tepid commodity-related earnings. Following this weak start, we expect growth to gain traction over the rest of the year, taking the annual average to 7% in FY25,” said Radhika Rao, Senior Economist at DBS Bank.
Industrial production Growth in the first quarter of FY25 was 5.2%, higher than the 4.7% recorded a year ago. However, the recent fall in the RBI consumer confidence data and the slowdown in the economy have led to a slowdown in the economy. Sale of passenger vehicles This raises concerns about consumer demand, experts said.
Passenger vehicle sales in India fell 2.5% year-on-year in July.
“Urban consumption is showing signs of moderation with a slowdown in passenger vehicle sales and growth in FMCG sales,” he said. First IDFC Bank in a note.
Rural consumption, which was subdued last year, is showing signs of improvement with continued strong growth in two-wheeler sales and higher tractor sales.
Service sector
“Services sector growth is expected to accelerate further, driven by financial, real estate and professional services. Services exports have held up well despite the overall global slowdown,” said Rajani Sinha, chief economist at CareEdge.
A prolonged monsoon or adverse weather events resulting in crop damage, a lower-than-expected rebound in private investment or an escalation of geopolitical risks are key risks to growth.
Rainfall during the June-September period has so far been 3.5% above normal.
The International Monetary Fund expects India’s economy to grow 7% in FY25, while the RBI has pegged it slightly higher at 7.2%.
The central bank kept interest rates unchanged at its review earlier this month, citing risks from volatile and high food prices.
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