India’s Economic Growth Tumbles to 5 percent in Q1 FY2019-20

India’s economic growth slowed down further in Q1 FY2019-20, dragged down by a slump in manufacturing, weaker consumer demand and slow private consumption. Asia’s third largest economy grew 5.0 percent Y-o-Y in Q1 FY2019-20, below 5.8 percent growth in Q4 FY2018-19 and below market expectations. The growth rate has fallen over last five quarters from 8.1 percent in Q4 FY2017-18 to 5 percent in Q1 FY2019-20.

• In gross value-added terms, the economy grew at 4.9 percent Y-o-Y in Q1 FY2019-20, compared to 5.7 percent in Q4 FY2018-19.
• Nominal GDP, without adjusting inflation, grew 8 percent Y-o-Y in Q1 FY2019-20, compared to 9.4 percent in Q4 FY2018-19 and 12.6 percent in Q1 FY2018-19.

The slowdown has been observed across all major sectors. Industrial growth was dragged down by manufacturing, mining and construction. Manufacturing growth, which has bearing on employment, fell down to 0.6 percent. Among the services sector, financial services saw sharp decline in growth, while trade and transportation saw stronger growth compared to the preceding quarter. Moreover, slowing world economy and its spillover effect through trade and financial channels have added to the slowdown in the economy.