India's economic growth slows to 6.7% in April-June
By Nikkei Asia, August 30, 2024
NEW DELHI -- India said on Friday that its economy grew 6.7% on an annual basis in the April-June period, down from 7.8% in the previous three months and marking the slowest pace of expansion in five quarters amid lower government spending before recent general elections.
The official data released on Friday was down from a Reuters poll of 52 economists, which pegged gross domestic product growth in the first quarter of the financial year at 6.9%.
The economy was hurt by the slowdown in growth of the primary sector, which includes agriculture and mining, and the tertiary sector including real estate and financial services. The primary sector grew 2.7% in the current quarter as against 4.2% in the corresponding period last year, while the tertiary sector grew 7.2% against 10.7% last year.
The secondary sector, which includes manufacturing and construction, grew 8.4% in the April-June quarter, exceeding the 5.9% growth last year.
The Reserve Bank of India had forecast first-quarter GDP growth at 7.1% in its monetary policy statement earlier this month. The central bank expects the economy to expand 7.2% in the full year ending in March 2025.
That forecast is lower than the 8.2% recorded in the last fiscal year, which was helped by the government's focus on capital expenditure.
The International Monetary Fund in July raised India's growth forecast in the current year to 7%, from its April estimate of 6.8%, buoyed by improved prospects for private consumption, particularly in the country's rural areas.
Government-run State Bank of India, the nation's largest lender, said in a report on Monday that the economy "remained resilient despite headwinds from supply chain pressures due to the rise in global freight and container costs, and semiconductor shortages."
The government reined in spending ahead of the six-week elections that lasted from April 19 to early June, the world's largest electoral exercise. Prime Minister Narendra Modi's ruling Bharatiya Janata Party unexpectedly lost its sole majority in the election. Even though Modi kept his position for a third term, his party had to rely on allies to form a government.
https://asia.nikkei.com/Economy/India-s-economic-growth-slows-to-6.7-in-April-June