India’s economic growth hits record 7.7pc in first quarter

Published: June 01, 2018 19:34:38 | Updated: June 04, 2018 14:11:28

India’s economic growth accelerated to 7.7 per cent year-on-year in January-March, its quickest pace in nearly two years driven by higher growth in manufacturing, the farm sector and construction.

The figure surpassed China’s growth rate of 6.8 per cent in the Q1, confirming India as the fastest growing major economy of the world, reports Reuters.

For the fiscal year that ended March 31, the Ministry of Statistics reported growth of 6.7 per cent, down from 7.1 per cent for a year earlier.

However, economists expect growth to be robust in the current financial year.

“Investment activity has picked up,” Economic Affairs Secretary Subhash Chandra Garg told reporters, adding that the government expected a further acceleration in the coming year.

India also reported 4.7 per cent growth in annual infrastructure output in April, signalling a recovery after it slipped to a three-year low of 4.2 per cent in 2017/18.

Construction activity of the world’s fifth-largest economy jumped to 11.5 per cent during January-March, after a 3.9 per cent drop in the year-ago period.

About 40 per cent of economists polled by Reuters expected a rate rise next week, driven by higher inflation at 4.58 per cent in April, above the Reserve Bank of India’s target of 4.0 per cent for the sixth month in a row.

Growth in Asia’s third-largest economy, reported by the ministry, trumped forecasts in a Reuters poll of annual growth at 7.3 per cent.

The ministry revised the October-December annual growth down to 7.0 per cent from the provisional 7.2 per cent it reported earlier.

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