India fiscal Q1 GDP growth slows to 6.7% on weak government spending

MUMBAI (ICIS)–India’s economic growth slowed down to 6.7% in the April-June 2024 on reduced government capital expenditure during the national elections and an uneven monsoon season, official data showed.

The fiscal Q1 growth was the lowest GDP growth in 15 months, according to the Ministry of Statistics and Programme Implementation (MoSPI) on 30 August. The country’s fiscal year ends in March.

The number was lower than the 7.8% growth posted in the previous quarter and the 8.2% pace set in April-June 2023.

The growth was also lower than the Reserve Bank of India’s (RBI) forecast of 7.2% for the quarter.

For current fiscal year ending March 2025, the central bank is projecting a GDP growth of 7.2%, with Q2 at 7.2%, Q3 at 7.3% and Q4 at 7.2%.

The slowdown in GDP growth occurred due to reduced government spending during the election period, RBI governor Shaktikanta Das said at a press conference on 31 August.

India’s general elections were held from 19 April to 1 June 2024.

“Domestic economic activity continues to be resilient on positive trends in agriculture, and an anticipated increase in government expenditure. Manufacturing activity continues to gain ground on the back of improving domestic demand,” he added.

An anticipated increase in government expenditure over the next few months would provide the required support to economic growth, Das said.

India’s economic growth has been robust, with an average growth rate of 8.3% over the last three years, he added.