Q1 GDP at 4.4% vs 4.8% (QoQ); consumption demand down

Gross Domestic Product or GDP for the first quarter of this fiscal year came in at a four-year low of 4.4 percent versus 5.4 percent (YoY), below street expectation of 4.7 percent. In the previous quarter, the GDP witnessed a 4.8 percent growth.

Agricultural growth, on which economists had pinned a lot of hope, came in at 2.7 percent (vs 1.4 percent) and industrial growth recorded a dismal 0.2 percent growth against an 1.8 percent in the same quarter previous year. Services sector grew in line with expectation at 6.6 percent. Also read: HDFC Bank economist Abheek Baruah's analysis of GDP numbers Mining, Manufacturing and Electricity registered growth rates of -4.5 percent (vs -1.6 percent), -1.2 percent (Vs -0.8 percent) and 3.5 percent (vs 6.4 percent) respectively during Q1 of 2013-14 as compared to the growth rates of in these sectors during Q1 of 2012-13. The key indicators of construction sector, namely, production of cement and consumption of finished steel registered growth rate of 3.3 per cent and 0.2 percent, during Q1 of 2013-14.

C Rangarajan sees second half of the year to be better than first half, primarily because of agriculture growth. Manufacturing will also see a pick up in from third quarter onwards. Speaking to CNBC-TV18 Ajay Srivastava - CEO - Dimensions Consulting Pvt Ltd does not expect the market to sell off because of Q1 GDP number. He says all were expecting a bad news and expect worse scenario for the next quarter. He does not see many investors buying shares for long-term investment. “I am not sure there is a big selloff round the corner because this GDP number was kind of anticipated in the system. Moreover, whether GDP is at 4.4 percent or 3.7 percent is relative factor”, says Srivastava He further adds, “I would be surprised if we even reach a number of 4.5 percent at the end of the year because we cannot forget one more data point which was the 63 percent of government fiscal deficit has already been spent till July and there is no way the government can spend more to revive this economy in the next 8 months.” Below are the sector wise growth/degrowth: Q1FY14 GDP At 4.4% Vs 4.8% (QoQ)
Q1FY14 GDP At 4.4% Vs 5.4% (YoY)
Q1FY14 Services Growth At 6.6% Vs 6.6% (QoQ)
Q1FY14 Services Growth At 6.6% Vs 7.7% (YoY)
Q1FY14 Ind Growth At 0.2% Vs 2.7% (QoQ)
Q1FY14 Ind Growth At 0.2% Vs 1.8% (YoY)
Q1 FY14 Agriculture Growth At 2.7% Vs 1.4% (QoQ)
Q1 FY14 Agriculture Growth At 2.7% Vs 2.9% (YoY)
Q1FY14 Construction Growth At 2.8% Vs 7% (YoY)
Q1FY14 Mfg Sector Growth At -1.2% Vs -1% (YoY)
Q1FY14 Mining Growth At -2.8% Vs 0.4% (YoY)