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India growth rate rises to 8.8% | India growth rate rises to 8.8% |
(about 2 hours later) | |
India's economy grew at its fastest rate for more than two years in the last quarter, according to official data. | India's economy grew at its fastest rate for more than two years in the last quarter, according to official data. |
In the three months to June, GDP was up 8.8% compared with the same period last year. | In the three months to June, GDP was up 8.8% compared with the same period last year. |
Although only the 11th biggest economy in the world, India is the second fastest-growing, behind China. | Although only the 11th biggest economy in the world, India is the second fastest-growing, behind China. |
Strong industrial and mining output helped boost the growth rate, India's statistics agency said. | Strong industrial and mining output helped boost the growth rate, India's statistics agency said. |
Industrial output rose more than 12%, while mining and quarrying jumped nearly 9%. | Industrial output rose more than 12%, while mining and quarrying jumped nearly 9%. |
Services including hotels and banking also did well, with output up nearly 10%. | |
Services account for 55% of India's economy, while industry makes up around 25% of output. | |
In July, the Reserve Bank of India said it expected annual growth for the current financial year to come in at about 8.5%. | In July, the Reserve Bank of India said it expected annual growth for the current financial year to come in at about 8.5%. |
But the bank has also said bringing down inflation remains a priority. | But the bank has also said bringing down inflation remains a priority. |
The inflation rate topped 11% last month and the strong performance in the economy is expected to encourage policymakers to continue raising interest rates. | The inflation rate topped 11% last month and the strong performance in the economy is expected to encourage policymakers to continue raising interest rates. |
Growth to slow | |
So far this year, the central bank has raised interest rates four times in a bid to curb inflation. | So far this year, the central bank has raised interest rates four times in a bid to curb inflation. |
Economists expect further rises and many expect them to slow India's economic growth in the coming months. | Economists expect further rises and many expect them to slow India's economic growth in the coming months. |
"We don't expect this growth rate to be as strong over the next two quarters," admitted Deepak Gopinath, a director at Trusted Sources Research. | |
"Having said that, among the Bric economies [Brazil, Russia, India and China], India is well placed to sustain strong growth. It is less dependent on developed countries than the others." | |
Chandrajit Banerjee, director general of the Confederation of Indian Industry, agreed that domestic demand was important for India's economy. | |
"With renewed pessimism on the extent of the recovery of developed economies, the Indian economy needs to depend on domestic drivers for growth," he said. |