GDP growth slows to 6.6% in Q3FY2019

GDP growth estimated at 7.0% for FY2019

India's gross domestic product (GDP) growth moderated to six-quarters low of 6.6% in Q3 of 2018-19 from 7.0% growth recorded in the previous quarter and 7.7% improvement in the corresponding quarter last year. Quarterly Gross Value Added (GVA) growth also eased to 6.3% in Q3 of 2018-19 from 6.8% in Q2 of 2018-19 and 7.3% in Q3FY of 2017-18.

The GDP growth moderation has been mainly driven by slow down in the GDP growth emanating from the agriculture sector to 2.7% from 4.2% growth in the previous quarter, while services sector growth has shown slight moderation to 7.2% from 7.4%. However, the industrial sector growth has improved to 7.1% in Q3 of 2018-19 from 6.7% growth in Q2 of 2018-19.

Within the industrial sector, the mining sector growth rebounded to 1.3% from 2.1% decline in the previous quarter. The growth for construction sector accelerated to 9.6% in Q3 of FY2018-19. However, the manufacturing sector growth moderated marginally to 6.7% and utilities sector to 8.2% in the quarter ended September 2018.

The services sector growth eased to 7.2% led by slower growth in public services at 7.6%, while trade, hotel, transport and communication has posted higher growth of 6.9% in Q3 of FY2019. The financial, real estate and professional services have also recorded improved growth of 7.3% in Q3 of FY2019.

The GDP growth has shown improvement to 7.2% in the nine months ended December 2018 compared with 6.8% growth in the corresponding period of last year. The GDP growth emanating from agriculture sector has eased to 3.8%, while services sector growth eased to 7.3%. However, the industrial sector growth has accelerated to 7.9% in nine months ended December 2018.

Second advance estimate of 2018-19

The GDP growth estimate for 2018-19 is revised downward to 7.0% from 7.2% growth estimated at first advances estimate level released in January 2019. The GDP growth for agriculture sector is expected to ease to 2.7% and services sector to 7.4% in 2018-19, while industrial sector growth estimate to accelerate to 7.7% in 2018-19.

The sectors which are likely to register growth rate of over 7.0% are construction, public administration, defence and other services, manufacturing, electricity, gas, water supply and other utility services and financial, real estate and professional services. The growth in the agriculture, forestry and fishing, mining and quarrying and trade, hotels, transport, communication and services related to broadcasting is estimated to be 2.7%, 1.2% and 6.8% respectively.

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