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Bombay: India’s economic activity grew 13.5 percent year-on-year in the second quarter ending June 30, according to data from the National Bureau of Statistics released Wednesday, benefiting from a post-pandemic recovery, but high inflation raises fears of a slowdown. .
It is the highest growth rate since the second quarter of 2021. Then, economic activity in India increased by 20.1 percent, compared to a contraction of 24.4 percent in the second quarter of 2020, coinciding with the restrictions imposed by the Covid epidemic.
The third largest economy in Asia has rebounded strongly since the outbreak of the epidemic, recording one of the fastest growth rates in the world, but it is still facing a rise in prices due to the high prices of raw materials.
future indications
India’s central bank chief economic adviser, Soumya Kanti Ghosh, said India was on the right track given the uncertainties, “with forward indicators continuing to show acceleration”.
Ghosh said the capital injection rebound in August reflected an improvement in investor sentiment after months of volatility.
But Wednesday’s figures did not live up to expectations after India’s central bank estimated growth at 16.2 percent.
Some economists fear headwinds will derail the economy and undermine growth next year.
Rising crude oil prices and a 7% drop in the rupee have taken a toll on the cost of living this year, and India’s trade balance is deteriorating.
Preliminary data showed that India’s trade deficit hit a record high of nearly $31 billion in July, down from $10.6 billion in the same month last year.
In August, India’s central bank raised interest rates for the third time in four months, bringing borrowing costs back to pre-pandemic levels.
The Bank of India forecast 7.2 percent growth for the current fiscal year due to “geopolitical tensions” and the risk of a “global recession”.