Real gross domestic product (GDP) growth rate slowed down to a six-quarter low to 6.6% in the three months to December 2018.
Real gross domestic product (GDP) growth rate slowed down to a six-quarter low to 6.6% in the three months to December 2018, led by the slowdown in both private and government consumption and a sharp drop in agriculture sector growth. The agriculture sector is still grappling with problems including low credit growth and higher non-performing loans.
Real gross value added (GVA) growth softened to 6.3% due to slowdown in agriculture growth. Based on the second advance estimate of 7% in FY19, GDP growth in the quarter-ending March is further expected to ease to 6.5%.
Private final consumption expenditure slowed to 8.4% year-on-year (y-o-y) in Q3FY19 from 9.8% y-o-y in Q2FY19. Similarly, government consumption expenditure, which was one of the major factor for higher growth in the last few quarters, too slowed down to 6.5% in Q3FY19 from 11.1% in Q2FY19.
Fixed investment grew 10.6% in Q3FY19 as compared with 10.2% in Q2FY19. Growth in manufacturing and electricity moderated to 6.7% and 8.2%, respectively, in real terms, and the decline in manufacturing GVA is consistent with the moderation seen in manufacturing Index of Industrial Production. However, the construction sector reported a robust growth of 9.6% in Q3FY19. For the full year, the sector is expected to grow at 8.9% as compared with 5.6% in FY18.