Key Highlights of Q1FY25 GDP Data:
- GVA Performance: Q1FY25 GVA exceeded expectations by 30bps, reaching 6.8% YoY, though GDP was slightly lower at 6.7%.
- Industrial Growth: Industrial sector growth improved to 7% YoY, with manufacturing showing a 7% increase. Electricity output advanced by 10%, supported by a favorable base, while mining also displayed solid growth at 7%. Agriculture growth was softer at 2%, aligning with expectations.
- Services Sector: Services growth remained robust at 8%, driven by Construction (11%), Public Administration & Defense (10%), Financing & Real Estate (7%), and Trade, Hotels, and Transportation (6%).
- Investment and Consumption: Despite the quarter’s elections, GFCF growth was steady at 7%, and private consumption (PFCE) growth rose to 7%, though government spending was weak.
- Trade: Exports increased by 9% YoY on a favorable base, while imports grew by 4%.
- Nominal GDP: Nominal GDP growth was at 10%, up from 8% a year ago.
Summary of Economic Trends:
Q1FY25 economic growth remained strong, despite a high base. The growth in GVA was driven by the manufacturing and services sectors, especially construction, while GDP was supported by a pick-up in private consumption and investments. Looking ahead, factors like an above-normal monsoon, higher agricultural output, continued private consumption growth, festival demand, and a focus on capital expenditure are expected to sustain economic activity. The GVA/GDP estimates for FY25-26 remain at 7-7.5%.
Detailed Breakdown:
- GVA: Q1FY25 GVA stood at 6.8% (PC/Consensus estimate: 6.5%/6.4%), compared to 6.3% in the previous quarter and 8% in Q1FY24.
- Industrial Sector: Industrial growth accelerated to 7%, up from 5% in Q1FY24, with manufacturing also growing by 7% compared to last year’s 5%. Electricity and utilities saw a robust 10% increase, compared to 3% the previous year, while mining growth was moderate at 7%.
- Services Sector: Services GVA grew by 8% compared to 10% in Q1FY24, with Construction leading at 11%, followed by Public Administration & Defense (10%), Financing & Real Estate (7%), and Trade, Hotels, Transport (6%).
- Agriculture: Agriculture GVA growth softened to 2%, compared to 4% the previous year.
GDP Performance:
- GDP Growth: Q1FY25 GDP grew by 6.7% YoY (PC/Consensus estimate: 7%/6.8%), compared to 7.8% in the previous quarter and 8% in Q1FY24.
- Investments: GFCF growth was resilient at 7.5%, slightly down from 8.5% last year, despite the general elections.
- Private Consumption: Private consumption (PFCE) grew by 7%, up from 6% in the same period last year, though there was a sequential dip of -2%, a much slower decline compared to the same period in the previous two years.
- Government Expenditure: Government spending remained similar to Q1FY24 levels.
- Trade: Exports increased by 9% YoY, benefiting from a favorable base, while imports grew by 4%. Sequentially, imports rose by 11% QoQ, while exports fell by -14%.