India GDP grew at 8.2% in Q1

Gladys Abbott
September 2, 2018

"We have informed them that our tax collection data, expenditure plans as well as deficit targeting figures are exemplary".

India is a massive importer of oil, however, and analysts say high crude prices and a tumbling rupee threaten to derail growth. For the first three months of 2018, India reported 7.7 percent annual growth, the fastest in almost two years. The June quarter GDP growth print marked a more-than-two-year high, powered by a strong performance of manufacturing and consumer spending. This, according to economists, was due to the impact of demonetisation.

With this, India continues to remain world's fastest growing major economy.

In November past year, S&P had ruled out any upgrade in India's sovereign rating through 2017 saying that it wants to see more efforts to lower government debt to below 60 per cent of GDP and that it did not expect revenues to rise enough to meaningfully lower the deficit over the medium term. The growth in the electricity, gas, water supply and other utility services was 7.3 per cent and in construction activities it was 8.7 per cent.

"This is probably the best GDP trend we have seen in the first half helped by a favourable base". The growth started picking up from Q2-FY18 albeit at a lower pace.

At 8 percent, GVA growth at two-year high in Apr-Jun quarter.

In July, retail inflation eased to 4.17 percent from a year earlier, but is projected to remain around 4.8 percent in the second half of the fiscal year.

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The sectoral analysis shows that, the manufacturing is the main driver of the growth in Apr-Jun quarter. Merchandise import growth has slowed because of gold imports, while export growth has also weakened.

The growth of GDP and GVA at basic prices in YoY terms improved substantially to 8.2% and 8.0%, respectively, in Q1 FY2019, from 5.6% each in Q1 FY2018, in line with the Monetary Policy Committee's assessment of a narrowing of the output gap.

Private and government expenditures together contributed almost 67% of the GDP during the April-June quarter.

Gross Value Added (GVA) for the given quarter rose by 8 percent as against 5.6 percent in the same quarter of previous year.

At constant (2011-2012) prices, the GFCF is estimated at Rs 10.65 lakh crore in April-June quarter of 2018-19 as against Rs 9.68 lakh crore in similar period of 2017-18.

Moody's also expects the CAD to widen to 2.5 per cent of GDP in the fiscal year ending March 2019, from 1.5 per cent in fiscal 2018.

India's gross domestic product (GDP) was valued at $2.597 trillion at the end of 2017 overtaking the French economy, which was valued at $2.582 trillion previous year.

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