India’s Q4 GDP growth hits 2-year high of 7.7%

Stellar show by manufacturing, construction, service sectors boosts economy

The Indian economy grew 7.7 per cent year-on-year during the January-March 2018 period, its quickest pace in nearly two years, helped by robust performance by manufacturing, construction and service sectors and good farm output, government data showed on Thursday.

The country retained its fastest growing major economy tag as the 7.7 per cent GDP growth was significantly higher than China's 6.8 per cent in the January-March period. However on yearly basis, the economy grew at a four-year low of 6.7 per cent in 2017-18, down from 7.1 per cent in the previous fiscal. The previous low was recorded in 2013-14 at 6.4 per cent.

"The Gross Domestic Product (GDP) at 2011-12 prices in the fourth quarter of 2017-18 registered growth rate of 7.7 per cent as against 5.6 per cent, 6.3 per cent and 7 per cent, respectively, in the first three quarters of 2017-18. Rapid growth in agriculture (4.5 per cent), manufacturing (9.1 per cent) and construction (11.5 per cent) contributed to the overall growth," the Central Statistics Office said in its national accounts data released on Thursday. The previous high GDP growth of 8.1 per cent was recorded in the April-June quarter of 2016-17.

Finance Secretary Hasmukh Adhia said, "The constant increasing trend of quarterly GDP numbers in the four quarters of 2017-18 at 5.6 per cent, 6.3 per cent, 7 per cent and 7.7 per cent indicates that the structural measures of reforms undertaken by government is now bringing rich dividends in the form of higher GDP growth rate." The government kept its economic growth forecast for current fiscal unchanged at 7.5 per cent buoyed by turnaround in manufacturing and pick up in investment. Finance Minister Piyush Goyal said the 7.7 per cent GDP growth in the fourth quarter of 201718 showed that the economy was on right track for higher growth in the future.

The gross value addition (GVA) for the January-March quarter expanded at 7.6 per cent from 6 per cent a year ago, data showed.

CII Director General Chandrajit Banerjee said, "The rebound in growth reinforces CII's own assessment that the economy is back on track and is set for a strong recovery after the period of disruptions sparked by demonetisation and GST implementation.”

Assocham Secretary General D S Rawat said, "While Indian economy is in cyclical recovery led by both investment and consumption, however, higher oil prices and tighter financial conditions will weigh on the pace of acceleration."