The economy expanded by 6.7 per cent in the first quarter (Q1) this fiscal—higher than the average decadal growth of 6.4 per cent in Q1—and by more than 7 per cent in the preceding four quarters.

Nominal GDP, however, grew by 9.7 per cent in Q1 FY25—higher than the 8.5-per cent growth seen in Q1 FY24.

The gross value added (GVA) grew by 6.8 per cent and the gap between GDP and GVA shrank to merely 19 basis points (bps) in Q1 FY25 compared to 122 bps in preceding three quarters.

SBI believes that this GDP-GVA gap will likely converge in FY25 as against 93 bps gap in FY24, it said in the August 30 issue of its newsletter ECOWRAP.

The expenditure side or the general demand shows largely positive picture with all heads except valuables showing positive growth in Q1 FY25.

Private consumption grew by a robust 12.4 per cent in current prices. Investments also registered a health growth of 9.1 per cent in current prices. But investment rate was flat at 31 per cent.

Government expenditure registered a growth of 4.1 per cent, which was slower, keeping in view that Q1 was also the general elections period.

Bank credit growth appears to be moderating after staying strong in recent years. SBI expects credit growth may grow in the range of 12-13 per cent and deposits will grow 10-11 per cent in FY25.

Fibre2Fashion News Desk (DS)