India posts an impressive 7.8% economic growth in April-June quarter

A farmer carries paddy crop after harvest on the outskirts of Guwahati, India, Tuesday, June 6, 2023. India’s economy has clocked up impressive growth of 7.8% in the first quarter of the current financial year. (AP Photo/Anupam Nath, file)

NEW DELHI  — India’s economy registered impressive growth of 7.8 percent in the first quarter of the current financial year (April-June), attributed to good performance by the agriculture and financial sectors, according to official data released on Thursday.

The World Bank says India is one of the fastest-growing economies of the world and is poised to continue on this path.

India’s agriculture sector recorded growth of 3.5 percent in three months, up from 2.4 percent in the April-June quarter last year, according to the data released by the government-run National Statistical Office.

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The rise in financial, real estate and professional services was 12.2 percent, up from 8.5 percent in April-June last year.

However, the manufacturing sector growth decelerated to 4.7 percent in the first quarter of the current fiscal year, compared to 6.1 percent a year ago, the data suggests. India’s financial year runs from April to March.

The output in mining, electricity, gas, water supply and construction also slowed in the April-June quarter.

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However, the World Bank said the persisting headwinds – rising borrowing costs, tightening financial conditions and ongoing inflationary pressures – are expected to weigh on India’s growth this year.

Indian media reports said the erratic monsoon, caused by the El Niño effect warming the eastern Pacific Ocean, is likely to moderate growth in the remaining three quarters of the year.

Real gross domestic product growth is likely to moderate to 6.3 percent in the current financial year from an estimated 6.9 percent in the last financial year, the World Bank said.

India’s federal bank expects the country’s yearly growth rate at 6.5 percent.