India's GDP growth-rate slows to 7.1%; still ahead of China's
What's the story
India's GDP grew at a rate of 7.1% in the July-September quarter (Q2) - its lowest growth rate in three quarters. That said, India's GDP growth rate still remained ahead of China's 6.5% GDP growth rate in the same quarter, thereby allowing India to retain the tag of the world's 'fastest growing economy'. Here are the details.
Sectors
How India's sectors fared in the July-September quarter
In terms of sectoral growth, data showed that manufacturing activities had grown by 7.4% this quarter, compared to 7.1% in the corresponding quarter a year ago. The construction sector saw a growth rate of 7.8% this quarter, compared to a 3.1% a year ago. Agriculture grew at 3.8%, up from 2.6% in the corresponding quarter of last year. Mining activities, however, declined by 2.4% compared to the corresponding quarter last fiscal.
Growth rate
The economy had grown faster in the first two quarters
Government data also revealed that the India's GDP had grown at a rate of 7.7% in the January-March quarter. The April-June quarter (Q1) of this fiscal had registered a growth of 8.2%. In terms of size, the Indian economy was estimated to be worth Rs. 33.98 lakh crore in July-September quarter of this fiscal, as against Rs. 31.72 lakh crore in the corresponding quarter last fiscal.
Twitter Post
Economic Affairs Secretary calls July-September GDP growth 'disappointing'
GDP growth for second quarter 2018-19 at 7.1% seems disappointing, tweets @SecretaryDEA Subhash Chandra Garg.
— BloombergQuint (@BloombergQuint) November 30, 2018
Read more: https://t.co/RTWU8BUWlw pic.twitter.com/MIKOJdcFWe
Impact
Slowing growth might prevent interest rate hikes by RBI
The slowdown in India's GDP growth rate might prevent the Reserve Bank of India (RBI) from hiking interests during its monetary policy review of December 5. Earlier, on October 5, the RBI had kept interest rates unchanged following successive hikes in earlier reviews. The rate-setting committee had also revised its inflation projections for the second half of FY2018-19 from 4.8% to 3.9%-4.5%.