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India growth rate slows to 5.3% in first quarter | India growth rate slows to 5.3% in first quarter |
(about 2 hours later) | |
The Indian economy grew at the slowest rate since 2003 in the first three months of 2012, due to a widening trade gap and poor investment. | The Indian economy grew at the slowest rate since 2003 in the first three months of 2012, due to a widening trade gap and poor investment. |
India's gross domestic product (GDP) grew by 5.3% in the quarter compared with a year earlier, data showed. | India's gross domestic product (GDP) grew by 5.3% in the quarter compared with a year earlier, data showed. |
That is down from 6.1% in the previous quarter. Analysts were expecting the same figure for January to March. | That is down from 6.1% in the previous quarter. Analysts were expecting the same figure for January to March. |
India is the third-largest economy in Asia but has been struggling with inflation and currency weakness. | India is the third-largest economy in Asia but has been struggling with inflation and currency weakness. |
'Shocking numbers' | 'Shocking numbers' |
Since July last year, the Indian rupee has seen one of the biggest declines among Asian currencies, dropping more than 27% against the US dollar. | Since July last year, the Indian rupee has seen one of the biggest declines among Asian currencies, dropping more than 27% against the US dollar. |
"Shocking numbers as growth was even lower than lows witnessed during the financial crisis," said Anubhuti Sahay from Standard Chartered Bank in Mumbai. | "Shocking numbers as growth was even lower than lows witnessed during the financial crisis," said Anubhuti Sahay from Standard Chartered Bank in Mumbai. |
The BBC's Yogita Limaye in Mumbai said that just a year ago India was aspiring for double-digit growth. | The BBC's Yogita Limaye in Mumbai said that just a year ago India was aspiring for double-digit growth. |
But a global slowdown has reduced external demand, and high inflation coupled with a weak rupee has made things more expensive within the country. | But a global slowdown has reduced external demand, and high inflation coupled with a weak rupee has made things more expensive within the country. |
'Comatose government' | 'Comatose government' |
Domestic demand, which India's economy is largely reliant on, has also slowed in part due to the political upheaval in the country. | Domestic demand, which India's economy is largely reliant on, has also slowed in part due to the political upheaval in the country. |
India's economy is suffering from "policy incoherence, shifting global risk appetite and a comatose government", said Rajeev Malik, senior economist at brokerage CLSA | India's economy is suffering from "policy incoherence, shifting global risk appetite and a comatose government", said Rajeev Malik, senior economist at brokerage CLSA |
India's Prime Minister Manmohan Singh admitted early this month that his government must do more to get the once fast-growing economy moving again. | India's Prime Minister Manmohan Singh admitted early this month that his government must do more to get the once fast-growing economy moving again. |
The Congress-led coalition government is caught up in a slew of corruption scandals. | The Congress-led coalition government is caught up in a slew of corruption scandals. |
Key policy reforms, including allowing foreign investment in India's retail sector, have been delayed in parliament for more than a year. | Key policy reforms, including allowing foreign investment in India's retail sector, have been delayed in parliament for more than a year. |
This has worried foreign investors and threatened the country's investment grade credit rating. | |
"This is definitely a very important signal for the government - this is a make or break situation for India and the government has to step on the panic button," said Rupa Rege Nitsure, chief economist at Bank of Baroda in Mumbai. | |
"If the government doesn't step in now, India's sovereign ratings may be jeopardised." |