The country’s GDP growth slowed down to a six-quarter low of 6 per cent in the first quarter (Q1) of FY25 (April-June) from 7.8 per cent in Q4 FY24 amid a contraction in government capital expenditure and a dip in urban consumer demand, the credit rating agency recently said in a statement.

Growth in Q1 FY24 was 8.2 per cent.

Q1 FY25 saw a temporary lull in some sectors due to parliamentary elections and sluggish government capital expenditure at both the central and state levels, a news agency cited ICRA chief economist Aditi Nayar as saying.

The Reserve Bank of India’s Consumer Confidence Survey revealed a ‘surprising downtick’ in urban consumer confidence, she said. Meanwhile, the lingering impact of last year’s unfavourable monsoon and an uneven start to the 2024 monsoon prevented a broader improvement in rural sentiment.

Lower volume growth combined with diminishing gains from commodity prices weighed upon the profitability of some of the industrial sectors, she said.

“On balance, we foresee a transient moderation in India’s GVA [gross value added] and GDP growth in Q1 FY25 to 5.7 per cent and 6 per cent respectively,” she added.

Fibre2Fashion News Desk (DS)