India s economy grew at a rate of 7.8% in the June quarter, driven by a recovery in services and an increase in investment. The data also showed an improvement in consumer demand. However, economists expect growth to moderate due to factors such as a below-par monsoon, high inflation, and an adverse global environment. Election spending and festive demand may provide some support to growth.
“Rural demand is on a recovery mode and governments sustained capital expenditure push is crowding in private investments,” said chief economic advisor, V Anantha Nageswaran, on Friday post the data release. While experts point out that growth is likely to slowdown in the coming quarters as the base effect wanes, they indicated that a consumption boost closer to the end of third quarter may provide some succour to full year growth.
While the continuation of government capex (both centre and states) in July led to a strong performance in steel and cement sectors, economists noted that the growth in cement and electricity sector, despite seasonal rains, indicated a progression of economic activity.
Agri and financial sectors buoy GDP growth to 7 8% in April-June quarter thehindubusinessline.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from thehindubusinessline.com Daily Mail and Mail on Sunday newspapers.