India's Growth Likely Slowed to 6.9% Last Qtr as Government Spending Lagged
Indian economy growth likely moderated, slowing to 6.9% last quarter due to lower government spending. This slowdown followed a robust period where growth exceeded 7%. In the April-June quarter, gross domestic product (GDP) was projected to have grown 6.9% annually, down from 7.8% in the prior quarter, according to a poll of economists.
Insights Into India's Economic Growth
The government is due to release GDP data, indicating the forecasts ranged from 6.0% to 8.1%. While Modi's government had initiated strong capital expenditure earlier, pre-election spending cuts have impacted growth. The BJP has returned to power but lost its outright majority.
Key Factors Impacting Growth
- The first quarter of the fiscal year showed a slight cooling in economic growth.
- Consumption, contributing over 50% of GDP, has seen growth slower than anticipated.
- Dhiraj Nim notes a significant public spending slowdown, particularly in capital expenditure.
Looking Forward
Predictions suggest a moderation in growth, averaging around 7.0% for this fiscal year and 6.7% in the next. With consumer price inflation projected at an average of 4.5%, the outlook remains cautious.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.