India GDP Growth Beats Forecasts at 7.7% in Q1

The Indian economy expanded 7.7 percent year-on-year in the first three months of 2018, higher than a downwardly revised 7 percent advance in the previous quarter and beating market forecasts of a 7.3 percent growth. It is the highest growth rate since the second quarter of 2016, boosted by a jump in investment. On the production side, manufacturing, agriculture and construction were the main contributors to growth.

Government spending recorded the highest growth rate (16.8 percent compared to 6.8 percent in Q4), followed by gross fixed capital formation (14.4 percent compared to 9.1 percent), stocks (7.8 percent compared to 7.2 percent) and household consumption (6.7 percent compared to 5.9 percent). On the other hand, exports slowed (3.6 percent compared to 6.2 percent) and imports rose faster (10.9 percent compared to 10.5 percent). Household spending accounted for 54.6 percent of the GDP; gross fixed capital formation for 32.2 percent; public expenditure for 9.5 percent; and changes in stocks for 0.7 percent. Exports accounted for 19.5 percent while imports subtracted 20.9 percent. 

Gross Value Added, that is, GDP excluding taxes expanded 7.6 percent, higher than 6.6 percent in Q4. Faster growth was recorded for manufacturing (9.1 percent compared to 8.5 percent in Q4); agriculture, forestry and fishing (4.5 percent compared to 3.1 percent in Q4); public administration and defense (13.3 percent compared to 7.7 percent); construction (11.5 percent compared to 6.6 percent); mining and quarrying (2.7 percent compared to 1.4 percent); and utilities (7.7 percent compared to 6.1 percent). On the other hand, slowdowns were seen in trade, hotels, transport, communication and services related to broadcasting (6.8 percent compared to 8.5 percent); and finance, real estate and professional services (5 percent compared to 6.9 percent).

Considering the 2017/2018 financial year (April 2017 to March 2018), the economy expanded 6.7 percent, below 7.1 percent a year earlier, but in line with government estimates of 6.75 percent.

India GDP Growth Beats Forecasts at 7.7% in Q1

Joana Taborda |
5/31/2018 1:56:21 PM