In the first quarter of FY25, GDP growth was recorded at 6.7%. The GVA growth stood at 6.8%, surpassing GDP growth and reversing the trend observed in the previous two quarters, where the GDP-GVA gap averaged 160 basis points.
After growing by less than 1% for the previous two quarters, the agriculture sector’s growth improved to 2%. But the growth of the agriculture industry stayed below the historical average, which is roughly 3.7%. Lower reservoir levels caused by last year’s unfavorable monsoon and heatwaves had an effect on the sector. As expected, manufacturing growth slowed in Q1, mirroring the decrease in IIP data and corporate profitability. While the services sector continued to grow strongly, especially in trade, hotels, transportation, communication and broadcasting services, and public administration services, the construction industry showed considerable progress.
Positively, there was a notable improvement in private final consumption expenditure. This is encouraging for continued momentum of growth in the upcoming quarters. Gross Fixed Capital Formation increased robustly overall by 7.5%, outpacing the performance of the preceding quarter. This is true even if the Center’s Q1 capital expenditures decreased. This implies higher capital expenditures by private companies and households. Notably, after the epidemic, household real estate investment has remained exceptionally robust. Overall export performance was strong as well, driven in Q1 by double-digit increases in exports of services and petroleum.
Positively, there was a notable improvement in private final consumption expenditure. This is encouraging for continued momentum of growth in the upcoming quarters. Gross Fixed Capital Formation increased robustly overall by 7.5%, outpacing the performance of the preceding quarter. This is true even if the Center’s Q1 capital expenditures decreased. This implies higher capital expenditures by private companies and households. Notably, after the epidemic, household real estate investment has remained exceptionally robust. Overall export performance was strong as well, driven in Q1 by double-digit increases in exports of services and petroleum.
