India’s GDP grows 13.5 percent in first quarter
New Delhi, Aug 31 (EFE).- The Indian economy grew 13.5 in the first quarter (April – June) of the ongoing financial year, driven by the private consumption rebounding due to lessened fear of Covid-19, marking the highest quarterly growth over the past year, despite the figure being below the Reserve Bank of India forecast.
“Real GDP (…) in Q1 2021-22 is estimated to be showing a growth of 13.5 percent,” the National Statistical Office said in a statement on Wednesday.
This is the highest GDP growth registered by the country since the first quarter of the financial year 2021-22, when the economy grew at 20.1 percent after a recession caused by successive coronavirus waves.
The recent growth has been driven by private consumption and sectors that depend on public interaction – such as hospitality and transport – increasingly returning to normalcy after the Covid-19 restrictions were withdrawn.
Despite a sharp spike from the growth in the previous quarter, which was recorded at 4.1 percent, the GDP expansion was below the estimates by the RBI, which had predicted a 16.2 percent growth for the first quarter earlier this month.
The central bank has projected the annual growth for the current fiscal year to touch 7.2 percent.
One of the main challenges to achieve this goal would be easing inflationary pressure on the country, as inflation remains above the upper tolerance level of 6 percent.
In order to achieve this target, earlier in August the RBI hiked its key lending rate for the third time in recent months to 5.4 percent, after it was raised by half a percentage point to 4.9 percent in June, following a 40 basic points increase to 4.40 percent in May. The May hike was the first in a year for the key indicator.
However, as per the central bank’s own estimates, inflation is set to remain high at around 6.7 percent in the FY 2022-2023. EFE