India's gross domestic product (GDP) quickened to 7.8% in the first quarter of FY27, up from revised 6.9% in the same quarter last year, as resilient consumption and exports coupled with robust government capex defied supply chain disruptions and inflated commodity prices triggered by the US-Iran war.
India’s April-June quarter GDP number was slower than the revised 8.6% growth in the previous three months.
Gross value added, a measure of economic activity that excludes taxes and subsidies, grew at 8.2% in real terms, up from 7.1% in the corresponding period last fiscal. Meanwhile, Nominal GVA growth stood at 11.5% for Q1 in real terms.
An Economic Times poll had forecast a 7.3% growth rate in the first quarter, higher than the Reserve Bank of India’s projection of 7%.
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Nominal GDP grew 10.3% in Q1, compared with 8.1% a year earlier.
Key primary sectors witnessed moderation during the first quarter. Agricultural growth slowed to 3.6% YoY in Q1 FY27 from 4.4% a year earlier, while the mining sector registered a sharp drag, shrinking 2.4% compared to a stellar 12.4% growth in the corresponding period last fiscal.
On the industrial front, manufacturing kept up its solid run, growing 9.2% in Q1 compared to 8.3% a year ago. The electricity sector saw a dramatic turnaround, jumping to 8.9% growth after shrinking 1.8% in the same period last year. Construction also picked up healthy steam, expanding 7.7% against 5.2% last fiscal, giving a solid boost to overall economic activity.
Last year's Goods and Services Tax (GST) rate cut and income tax reductions likely continued to support household disposable income and demand, helping cushion the impact of rising inflation. But economists expect the recent pickup in private investment to be temporary.
