India’s Gross Domestic Product (GDP) grew 5 per cent in the April-June 2019, much lower than 8 per cent growth in the same quarter last fiscal.
It is also lower than 5.8 per cent GDP growth in the March quarter in 2018-19. This is the second straight quarter when the quarterly GDP growth was lower than 6 percent.
It has opened the doors for more interest rate cuts by the RBI in the coming days.
The slowdown is broad based and GDP growth during the first quarter was dragged down by manufacturing growth at 0.6 percent as compared to 12.1 percent in same quarter last fiscal.
The Gross Value Added (GVA) for the June quarter stood at 4.9 per cent, lower than 7.7 per cent growth in the same quarter last fiscal.
The latest GDP growth print of 5 per cent is the lowest in six years. Private consumption, which was the bulwark of the economy, has fallen in the quarter under review.
The Reserve Bank of India has recently projected India’s GDP growth for 2019-20 at 6.9 per cent.
The RBI annual report released on Thursday said that it was difficult to diagnose the reason or nature of India’s slowdown.
“The diagnosis is difficult, these conditions are hard to disentangle cleanly, at least in the formative state”, the RBI report said.