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India’s Economy Maintains Momentum Into FY27’s Second Quarter
India’s economy started the new financial year strongly.
The government says the economy grew 7.8% in the first three months.
It expects growth to continue in the next three months, but at a slower 7.3% pace.
Manufacturing, construction and services all helped the economy expand.
People’s spending and business investment also supported growth.
Government actions helped protect the country from disruptions in energy supplies and trade routes.
Some economic indicators, such as manufacturing activity and e-way bills, grew more slowly.
Prices faced pressure from oil costs and changing weather, but most items still had inflation below 4%.
India’s real GDP grew 7.8% in Q1 FY27, the strongest first-quarter growth in the current series.
The Finance Ministry’s September review projects real GDP growth of 7.3% in Q2 FY27.
Manufacturing, construction and services supported broad-based expansion, with investment becoming a stronger growth driver.
Industrial GVA grew 7.7% year-on-year in Q1, led by 9.2% manufacturing growth.
Inflation pressures increased because of global oil prices and weather volatility, although 69% of items remained below the 4% target.
- Who
- The Indian economy and the Ministry of Finance, which issued the September Monthly Economic Review.
- What
- India recorded 7.8% real GDP growth in Q1 FY27, while the review forecast 7.3% growth for Q2.
- Where
- India, amid global disruptions linked to the West Asia conflict.
- When
- The review was issued in September; it covered Q1 FY27 and provided a Q2 outlook.
- Why
- Growth was supported by domestic demand, investment, industry and services, while government measures helped limit the effects of external energy and trade shocks.
Key facts
- Q1 FY27 GDP growth
- 7.8% year-on-year
- Q2 FY27 GDP forecast
- 7.3% real GDP growth
- Industrial GVA growth
- 7.7% year-on-year in Q1 FY27
- Manufacturing growth
- 9.2% in Q1 FY27
- July IIP growth
- 6.7% year-on-year
- August Manufacturing PMI
- 52.8
- Inflation basket below target
- 69% of items were recording inflation below the 4% target
- Export outlook
- Exports could approach US$1 trillion for the full financial year at the reported run rate
Quotes
Finance Ministry’s Monthly Economic Review
The Finance Ministry publication assessing India’s economic performance and outlook.
“At the current run rate of nearly USD 400 billion in the first five months of the year, India’s overall export value for the full financial year could approach a trillion US dollar. That is a very strong confirmation that India’s trade agreements are providing impetus to India’s exports”
thehansindia.com
“Our nowcasting measure, unveiled in the Economic Survey earlier this year, anticipates a real GDP growth rate of 7.3 per cent in the fiscal second quarter.”
thehansindia.com
Sources
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