GDP growth slows to 25-quarter low of 5 pct in Q1 FY20

The pace of growth of GDP and GVA in Q1 FY20 recorded a surprisingly sharp slowdown to 5 percent and 4.9 percent, respectively, from 5.8 percent and 5.7 percent, respectively in Q4 FY19.

The main culprit was the manufacturing sector, which saw a collapse in growth to 0.6 percent in Q1 FY20 from the low 3.1 percent in Q4 FY19.

Accordingly, while the headline GVA growth slowed to 4.9 percent in Q1 FY20 from 5.7 percent in Q4 FY19, the expansion of GVA ex-manufacturing recorded a narrower dip to 5.9 percent from 6.3 percent, respectively. 

Sectoral Trends Industrial growth was dragged down by manufacturing, mining, and construction. Manufacturing growth, which also has a bearing on employment, saw growth fall to 0.6 percent. Among the services sectors, financial services saw a sharp slowdown in growth, while the trade and transport segment saw stronger growth compared to the preceding quarter. 

• Agriculture grew at 2 percent in Q1 compared to a contraction of 0.1 percent in the preceding quarter. 

• The mining and quarrying sector growth stood at 2.7 percent in Q1 compared to 4.2 percent in Q4.

• Manufacturing grew at 0.6 percent compared to 3.1 percent in the last quarter. 

• Electricity and other public utilities grew by 8.6 percent in Q1 as against 4.3 percent last quarter. 

• Agriculture grew at 2 percent in Q1 compared to a contraction of 0.1 percent in the preceding quarter.

• The mining and quarrying sector growth stood at 2.7 percent in Q1 compared to 4.2 percent in Q4. 

• Manufacturing grew at 0.6 percent compared to 3.1 percent in the last quarter. 

• Electricity and other public utilities grew by 8.6 percent in Q1 as against 4.3 percent last quarter. 

• Construction grew at 5.7 percent in Q1 compared to 7.1 percent in Q4.

• Trade, hotel, transport, communication growth stood at 7.1 percent in Q1 compared to 6 percent in the previous quarter. 

• The financial services sector grew at 5.9 percent in Q1 compared to 9.5 percent in the previous quarter. 

• The public administration segment grew at 8.5 percent in Q1 as against a growth of 10.7 percent in Q4.

India’s fiscal deficit in July was at 77.8 percent of its 2019-20 target. 

The gap between the government’s revenue and expenditure rose to Rs 5.47 lakh crore at the end of July, according to data released by the Controller General of Accounts. That’s 77.8 percent of the budget estimate of Rs 7.03 lakh crore for 2019-20. The fiscal deficit, however, was narrower than in July last year when it stood at 86.5 percent of the FY19 target. 

SOURCE

GDP | Economy Growth | Crisis | Indian Economy | Budget | FY19-20