Indian growth slows to 7.7pc
NEW DELHI, Aug 30: India posted its slowest economic growth in six quarters on Tuesday, with output up 7.7 per cent year-on-year as expansion was held back by the longest stretch of monetary tightening in a decade.
The figure for March-June slightly outpaced market expectations, but was just below the 7.8 per cent expansion logged in the previous quarter. Analysts had expected growth of 7.6 per cent for the three months.
Last week the central bank, which has hiked interest rates 11 times in 18 months as it struggles to curb near double-digit inflation, warned of “a difficult year”.
The rises in the cost of borrowing have slowed investment and consumer demand in Asia’s third-largest economy.
“Industrial output growth has been on a sustained downtrend,” said Capital Economics before the data were released.
Economists say the central bank, which has said it is unwilling to accept inflation of 9.22 per cent as “the new normal”, could raise rates again at its next policy meeting in September.
While 7.7 per cent expansion appears rapid compared with sluggish Western growth, economists say the slowing of India’s growth rate will undermine government efforts to tackle the country’s endemic poverty.—AFP