GDP surpasses expectations despite some moderation

Key takeaways from Q4 GDP

• Growth slows but stays strong in fourth quarter: GDP growth slowed to 7.8% on-year in the fourth quarter (Q4) of last fiscal from 8.6% previous quarter but was higher than 6.1% in the year-ago quarter. Growth for the third quarter was also revised up to 8.6% from 8.4%.
• Investment slows, consumption revives: The growth moderation was driven by the fixed investment segment on the demand side. Private consumption trailed overall GDP growth but improved its performance in the second half of the fiscal. Net exports also impacted GDP growth positively in Q4, driven by pick up in export growth and moderation in import growth
• GVA growth markedly lower: On the supply side, gross value added (GVA) growth at 6.3% was much lower than the GDP growth in Q4. A strong growth in net taxes pushed the GDP growth higher than GVA.
  The industrial and services sectors saw a moderation, while the agriculture and allied sector inched up slightly.
• Annual growth revised up sharply: Q4 growth was much stronger than 5.9% factored in in the second advance estimates (SAE) of the National Statistics Office (NSO) in February. This prompted the NSO to revise up the fiscal 2024 GDP growth estimate to 8.2% (which is the provisional estimate), from 7.6% in the SAE. GVA growth was also revised up to 7.2% from 6.9%.
  The provisional estimates provide a better estimate with updated data and have longer shelf life as the next estimate for fiscal 2024 from NSO will come only in 2025.
  Growth in fiscal 2024 was primarily driven by fixed investments on the demand side and industry on the supply side.
• Nominal GDP slowed to 9.9% from 10.3% previous quarter. For fiscal 2024, it grew 9.6%, slower than 14.2% previous year.