India's Q1 GDP growth beats expectations, experts call it "very impressive"

New Delhi [India], August 30 (ANI): Observers and experts of the Indian economy have hailed the first-quarter GDP growth figures, saying that the numbers are a strong sign of economic resilience.

According to the government data released on Friday, India's economy surged ahead with a robust 7.8 per cent growth in Q1 of FY 2025-26, exceeding the Reserve Bank of India's projection of 6.5 per cent and marking the highest quarterly growth in five quarters.

India's nominal GDP grew at an 8.8 per cent rate during the April-June quarter.

D K Srivastava, Chief Policy Advisor at EY India, called the growth "very impressive," highlighting the performance of key sectors.

"Some of the high-weight sectors, as far as output is concerned, namely manufacturing and the three important service sectors, are showing a growth rate in the range of 8 to 9 per cent on average," he said.

He attributed much of the boost to strong government spending, with "investment expenditure grew by close to 30 per cent and consumption expenditure, nearly 20 per cent."

However, Srivastava pointed to concerns about exports: "The contribution of net exports has contracted, whereas in the last year it was positive."

Looking ahead, he expects Q2 growth to ease to somewhere in the range of 6.5 to 7 per cent, due to heavy monsoon and some delays in government projects.

Manoranjan Sharma, Chief Economist at Infomerics, echoed the optimistic tone. "There are some concerns that this year the GDP growth may not be that good, but these numbers are well above our expectations. Our expectation was something in the range of 6.7 to 6.8 per cent. So in this light, 7.8 per cent, which is the highest growth in the last five quarters, is a very good number. All sectors of the economy have done very well."

Sharma emphasised that the Indian growth process will stay intact.

Sources in the Finance Ministry also said that the GDP growth figures reflect strengthening momentum in the economy, anchored by strong macroeconomic fundamentals. They noted that supply-side growth was driven by manufacturing, construction, and services, reflecting an all-round growth.

On the demand side, robust expansion in Private Final Consumption Expenditure (7.0 per cent) and Gross Fixed Capital Formation (7.8 per cent) underpinned performance, the sources said, adding that Private Final Consumption Expenditure's (PFCE) share in GDP rose to 60.3 per cent, the highest first-quarter level in 15 years.

The Government's capital expenditure also sustained the momentum in Gross Fixed Capital Formation's (GFCF) growth.

On the investment front, Central government capital expenditure posted a significant 30.1 per cent increase over the average of the past three years. Private investment sentiment also improved, with new investment announcements rising 3.3 times on a year-on-year basis in Q1. Additionally, capacity utilisation remained high, signalling further manufacturing growth ahead. (ANI)

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