India economic growth slows to 7.9 per cent

[Naveed Yaseen]

MUMBAI, India: India’s economic growth slowed to 7.9 per cent in the April-June quarter, down from 9.2 per cent in the same period last year, amid a slump in manufacturing, the government said on Friday.

Growth, which has averaged 8.8 per cent over the past five years, is at its slowest pace since 2004, government data showed.

The decline in the growth rate was widely anticipated and comes after months of monetary tightening, as authorities have tried to reign in surging inflation.

"These are numbers that shouldn’t surprise," said Saumitra Chaudhury, a member of the Prime Minister’s Economic Advisory Council and chief economist at the credit rating agency ICRA Ltd, a Moody’s affiliate.

"When you have monetary tightening, you do get lower growth. That was expected," he said. "But it’s not terribly low; 7.9 per cent is still high by historical standards."

The benchmark Sensex index jumped 3.7 per cent to 14,564.53, as some investors had been bracing for worse numbers. Banks led the rally on moderating inflation figures released Thursday.

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