India’s economy grows at fastest pace in a year; slowdown expected

NEW DELHI: India’s economy grew at its fastest pace of 13.5% year-on-year in the April-June quarter though economists said growth is likely to lose momentum in coming quarters as higher interest rates cool economic activity.

June quarter growth, driven by manufacturing and services, such as accommodation and travel and rebounding from pandemic curbs, came in below a 15.2% forecast by economists in a Reuters poll, but well above 4.1% growth in the previous quarter.

The last time India’s economy grew faster was in April-June 2021 when it gained 20.1% from the pandemic-depressed level a year earlier.

Manufacturing grew to 6.5% growth after a 0.2% contraction in the previous quarter while the construction sector grew 16.8% after 2.0% growth in the previous quarter, data showed.

Economists said Asia’s third-largest economy faced downward risks with tighter monetary conditions and higher energy and commodity prices expected to weigh on consumer demand and companies’ investment plans.