GDP growth slows to 5.3% in Q2FY2015

Industrial sector growth nearly halved to 2.2% in Q2FY2015

The Central Statistical Office (CSO) released quarterly estimates of India's Gross Domestic Product (GDP), showing moderation in GDP growth to 5.3% in the quarter ended September 2014 (Q2FY2015) from two-and-half years high of 5.7% in the previous quarter ended June 2014 (Q1FY2015) over corresponding quarter last year. However, the GDP growth has shown improvement from 5.2% growth in the corresponding quarter last year.

A sequential deceleration in the GDP growth was mainly caused by moderation in the growth agricultural and industrial sector in Q2FY2015 from Q1FY2015. However, the services sector growth has shown improvement for the second straight quarter in Q2FY2015.

On the demand side, the net foreign demand weakened, while the domestic investment demand growth slowed sharply to remain flat from 7% in Q1FY2015. However, the domestic private consumption and government consumption growth improved in Q2FY2015.

The growth of the agricultural sector exhibited higher than expected growth of 3.2% in Q2FY2015, in the backdrop of deficient southwest monsoon rainfall in 2014.

The growth in the industrial sector nearly halved to 2.2% in Q2FY2015, compared with 4.2% growth in the previous quarter. The performance of the industrial sector was impacted by sharp slowdown in the manufacturing GDP to 0.1%. However, the mining 1.9%, utilities 8.7% and construction 4.8% recorded healthy growth, though exhibited slight moderation from Q1FY2015.

Services sector witnessed higher growth of 7.1% in Q2FY2015 from 6.8% in the previous quarter ended June 2014. Within the services sector, the 'community, social & personal services' growth accelerated to 9.6%, while the 'trade, transport & communication' also witnessed higher growth of 3.8% in the quarter ended September 2014. Meanwhile, the 'financing, insurance, real estate & business services' growth eased slightly to 9.5% in Q2FY2015.

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