New Delhi: Of India Economy Possibly achieved its sharpest annual expansion in a year in the April-June quarter, economists said, the pace is expected to slow sharply in this quarter and in the next two as higher interest rates hit economic activity.
Gross domestic product (GDP) in the three months to June 30 was probably 15.2% higher than a year ago, a Reuters poll showed this week. January-March GDP was up 4.1% from a year ago.
The last time India’s GDP achieved high annual growth was in April-June 2021, when it was 20.1% above post-pandemic levels a year ago.
Forecasts for the latest quarter ranged from 9.0% to 21.5%. The official release is due on Wednesday at 1200 GMT.
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 latest Reuters poll showed economists had expected a faster annualized 6.2% growth in the quarter, before falling 4.5% in October-December.
Many economists expect a further increase of around 50 basis points next month, followed by a further increase of 25 basis points.
consumer expenditureThe economy, which accounts for about 55% of economic activity, has been badly hit following the rise in food and fuel prices, although monthly inflation has moderated over the past three months.
The sale of two wheelers is an indicator of the health of the economy. They were 5.03 million units in April-June, higher than the same periods in 2021 and 2020, but about a fifth lower than in 2019, industry data showed.
Economists believe that such frequently available indicators show India’s economy, Asia’s third largest, is holding up well to the deteriorating conditions so far.
Shilan Shah, India economist at Capital Economics, Singapore, said, “More timely data suggests that resilience has continued in Q3 (July-September) as well, noting that the economy has recovered from the effects of the Omicron wave in January-March. had better resisted the previous wave of the pandemic.
But the economy faces a downside risk, as investment plans of companies could be hit by tighter monetary conditions and higher input costs, Shah wrote in a note to clients last week.
The rupee’s depreciation of over 7% against the dollar this year has made imported goods costlier for consumers and businesses.
Gross domestic product (GDP) in the three months to June 30 was probably 15.2% higher than a year ago, a Reuters poll showed this week. January-March GDP was up 4.1% from a year ago.
The last time India’s GDP achieved high annual growth was in April-June 2021, when it was 20.1% above post-pandemic levels a year ago.
Forecasts for the latest quarter ranged from 9.0% to 21.5%. The official release is due on Wednesday at 1200 GMT.
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 latest Reuters poll showed economists had expected a faster annualized 6.2% growth in the quarter, before falling 4.5% in October-December.
Many economists expect a further increase of around 50 basis points next month, followed by a further increase of 25 basis points.
consumer expenditureThe economy, which accounts for about 55% of economic activity, has been badly hit following the rise in food and fuel prices, although monthly inflation has moderated over the past three months.
The sale of two wheelers is an indicator of the health of the economy. They were 5.03 million units in April-June, higher than the same periods in 2021 and 2020, but about a fifth lower than in 2019, industry data showed.
Economists believe that such frequently available indicators show India’s economy, Asia’s third largest, is holding up well to the deteriorating conditions so far.
Shilan Shah, India economist at Capital Economics, Singapore, said, “More timely data suggests that resilience has continued in Q3 (July-September) as well, noting that the economy has recovered from the effects of the Omicron wave in January-March. had better resisted the previous wave of the pandemic.
But the economy faces a downside risk, as investment plans of companies could be hit by tighter monetary conditions and higher input costs, Shah wrote in a note to clients last week.
The rupee’s depreciation of over 7% against the dollar this year has made imported goods costlier for consumers and businesses.