India’s Q1 FY25 GDP Growth Stays Resilient At 6.7 Per Cent, Boosted By Key Sectors Despite Global Challenges

India’s economy maintained a robust growth trajectory in Q1 FY25, registering a 6.7 per cent rise in real GDP, showcasing resilience in the face of global uncertainties.

The figures highlight the country’s ability to sustain momentum despite high base effects from previous years. Several sectors, including manufacturing, construction, and services, emerged as key drivers of this growth, signalling a positive outlook for the coming quarters.

Strong Performance In Core Sectors

The manufacturing sector, which forms the backbone of India’s industrial output, grew by an impressive 7 per cent, a significant improvement over last year’s 5 per cent growth.

The construction sector outperformed expectations, expanding by 8.6 per cent, reflecting increased activity in infrastructure and housing development. The financial, real estate, and professional services sectors also posted healthy growth, registering a 7.1 per cent rise.

Resilient Export Growth Amid Global Slowdown

Despite sluggish global trade, India’s export sector saw a commendable growth of 8.7 per cent, underscoring the country’s growing international competitiveness.

According to UNCTAD data, global merchandise trade only expanded by 1 per cent in Q1 2024, while service trade grew by 1.5 per cent.

Outlook for Growth: Indicators Signal Continued Expansion

Several key indicators suggest a positive outlook for India’s economic growth in the coming quarters.

Additionally, Kharif sowing, a key factor for the agricultural sector, increased by 1.1 per cent year-on-year as of August 2024, pointing to a solid agricultural output in the coming months.

The rise in fuel consumption by 7.4 per cent in July 2024, compared to a 2.7 per cent increase in June, reflects a recovery in domestic demand and industrial activity.

Further Strengthening Domestic Indicators

Domestic manufacturing and services continue to expand, with both PMI Manufacturing and PMI Services indices well above the 50-mark.

The growth is further reinforced by a 10.28 per cent increase in GST revenues in July 2024, a rise in vehicle registrations by 18.6 per cent, and a 6.9 per cent increase in air passenger traffic during June.

Rail freight traffic rose by 10.1 per cent in June, highlighting increased industrial activity and logistical movement.

Similarly, digital payments through UPI surged by 34.6 per cent in July, signalling a broader adoption of digital transactions across the country.

Banking And Employment Trends Support Growth

The banking sector witnessed strong credit growth, with non-food credit expanding at 13.5 per cent year-on-year by mid-August 2024.

Employment data also paints a positive picture, with net additions to payroll under the Employees’ Provident Fund Organization (EPFO) standing at 19.50 lakh in May 2024, more than double the 9.25 lakh additions recorded during the same period last year.