NEW DELHI- India’s economy grew 13.5 percent in the April-to-June quarter, its fastest pace in a year, though economists said growth is likely to lose momentum in coming quarters as higher interest rates cool economic activity.
The Reserve Bank of India (RBI) has raised its benchmark repo rate by 140 basis points since May, including 50 basis points this month, while warning about the impact of a global slowdown on domestic growth prospects.
The June quarter’s annual growth, driven by manufacturing and services, such as accommodation and travel and rebounding from pandemic curbs, came in below a 15.2 percent forecast by economists in a Reuters poll, but well above 4.1 percent growth in the previous quarter.
The last time India’s economy grew faster was in April-June 2021 when it gained 20.1 percent from the pandemic-depressed level a year earlier.
“Growth in the June quarter is good enough to achieve over 7 percent annual growth for the whole fiscal year,” T.V. Somanathan, the finance ministry’s top official, said after the release of data, noting GDP had exceeded pre-pandemic levels by nearly 4 percent.
He said recent rate hikes by the central bank were unlikely to impact private investments. – Reuters
