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India: Economic growth picks up in Q1 2014/15

August 29, 2014

GDP increased 5.7% over the same period last year in the April-June period (the first quarter of fiscal year 2014/2015). The reading marked a notable improvement over the 4.6% expansion registered in the fourth quarter of fiscal year 2013/14 and marked the fastest pace of growth in more than two years. In addition, the expansion overshot the 5.5% increase the markets had expected.

The quarterly reading reflected that the all-important manufacturing sector bounced back from a 1.4% contraction in Q4 2013/14 to a 3.5% expansion in Q1 2014/2015. In addition, the mining sector swung from a 0.5% decrease in the January-March to a 2.1% expansion in the three-month period to June. Moreover, electricity, gas and water production as well as construction showed notable improvements in Q1 2014/15, increasing 10.2% and 4.8%, respectively. Growth in financial services maintained a healthy performance, rising 10.4% in Q1 2014/15 (Q4 2013/14: +12.4% yoy). Meanwhile, agriculture slowed from a 6.3% expansion in Q4 2013/2014 to a 3.8% increase in Q1 2014/2015.

The government expects growth of around 5.0% in FY 2014/15. Meanwhile, the Reserve Bank of India expects growth to increase to between 5.0% and 6.0% in fiscal year 2014/2015. Forecasters polled by FocusEconomics expect GDP to grow 5.3% in fiscal year 2014/2015, which is unchanged from last month’s forecast. For fiscal year 2015/2016, the panel sees economic growth at 6.1%.


Author:, Senior Economist

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India GDP Q2 2014

Note: Year-on-year changes of GDP in %.
Source: Ministry of Statistics and Programme Implementation (MOSPI) and FocusEconomics Consensus Forecast.


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