GDP growth slows down to three-year low of 5.7% for Q1 of 2017-18

The Central Statistical Organisation (CSO) has released GDP figure for first quarter (April-June) of 2017-18. And it looks like, Indian economy is still reeling from the post-effects of demonetization. GDP growth has slowed to 5.7% in Q1 of 2017-18. It is a three-year low. In Q4 of 2016-17, it was 6.1% and India lost its tag of being the fastest growing economy of the world. 

It has missed the Reuters estimate, which predicted that the economy will grow at 6.6% in Q1. RBI in its annual report has predicted 7.3% GDP growth for 2017-18. That certainly seems to be an uphill task from here on. 

Manufacturing industry has been the worst hit, growing at 1.2% versus 10.7% YoY. Q1 farm sector growth at 2.5% is flat. Utility services sector growth has recorded 7% growth. It grew by 10.3% on Q4 2016-17. GVA growth stands at 5.6% Vs 7.6% last quarter. 

Chief statistician of India, TCA Anant has reacted to the GDP data. He has said that the slowdown is primarily on account of poor performance of the manufacturing sector. He says that manufacturing sector has been hit by moderate corporate results. Rise in cost and reduced inventory two factors responsible for reduced GVA, says TCA Anant. According to him, uncertainty regarding GST led to corporates pulling down their stock.