New Delhi
The Congress on Monday criticised the government’s GDP numbers for the April-June 2025 quarter, calling them overly optimistic and pointing out that the effects of U.S. tariffs are yet to be felt. Congress general secretary Jairam Ramesh said the reported growth creates “irrational exuberance,” as front-loading of exports to the U.S. by traders attempting to avoid tariffs temporarily boosted export figures, inflating the headline GDP growth.
Ramesh highlighted that while the economy posted a 7.8% growth rate—the fastest in five quarters—urban consumption remains weak, and rural consumption continues to face structural challenges. He also noted that nominal GDP growth, unadjusted for inflation, remains subdued compared with the January-March 2025 quarter.
“Consumption, investment, and trade are the primary drivers of GDP growth, yet nearly 1.8 percentage points of the quarterly growth rate are unaccounted for by these factors,” Ramesh said, calling the discrepancy significant and in need of explanation. He added that sales growth in manufacturing continues to slow, despite profits showing some improvement.
The Congress leader warned that the “Trump tariff shock” has not yet impacted the economy and that its real consequences are expected to emerge in the second quarter, affecting key export sectors such as textiles.
Government data indicated that the first-quarter GDP growth was supported by strong performance in agriculture, along with robust contributions from services like trade, hotels, finance, and real estate. However, Congress cautioned that the temporary boost from pre-tariff exports may mask underlying weaknesses in domestic demand.