India GDP growth was 7.7% for April-June

Business

oi-Shoaib MD

By Shoaib Md

Published: Tuesday, August 30, 2011, 13:14 [IST]

GDP data was released by the government of India. The Indian economy grew by 7.7% in the first quarter April 1-June 30 period. This was slower than the growth of 9.3% during the corresponding quarter in 2010 (YoY). It was also slower than the growth in the previous quarter's 7.8%.

Manufacturing during Q1 saw growth of 7.2% versus 12.7% YoY. Minig saw a massive slowdown in its growth at 1.8% versus 7.1% YoY. The segment which went up faster was agriculture at 3.9% vs to 2.4% YoY.

Of the last six quarters this was the slowest growth reported in Asia's third-largest economy. Electricity, gas growth for Q1 was at 7.9% versus 5.6% YoY. Meanwhile, construction grew at 1.2% versus 7.7% YoY.

Industrial output in June grew an annual 8.8% more than the forecasts. Despite inflation easing to 9.22% in July, the persistent high price of manufactured goods will ensure that policy remains tight in the economy even though there is a risk to growth.

Monsoon rains, the very important ingredient to boost farm production along with rural incomes were 8% below normal during the week to August 24.

In its report last week the central bank had said it will focus on fighting inflation. And for the last few weeks rather months the RBI is clear that curbing inflation is its high priority and more important than growth. The Central bank has hiked interest rates 11 times in the last 18 months.

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