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Indian economy loses momentum; GDP growth slows down to 7.1 percent in September quarter

Indian economy loses momentum; GDP growth slows down to 7.1 percent in September quarter

Despite a strong industrial output, with the manufacturing growth at 7.4 per cent, the GDP growth rate has moderated in the July-September period. The first quarter figures of 8.2 per cent was the best in nine quarters.

The momentum Indian economy gained has hit a hurdle with the GDP growth slowing down to 7.1 per cent in the second quarter as compared to 8.2 per cent in the first quarter. This is the slowest pace of growth in the past three quarters.

Despite a strong industrial output with manufacturing growing at 7.4 per cent, the GDP growth has moderated. The first quarter figure of 8.2 per cent was the best in nine quarters.

The GDP numbers for September quarter are lower than anticipated. Reuters poll had forecast it to be at 7.4 per cent. However, India continues to remain the world's fastest growing major economy. China had grown at the rate of 6.5 per cent in the quarter under review.

Commenting on the slowing economic growth, Economic Affairs Secretary Subhash Chandra Garg said that the GDP growth "seems disappointing", but growth rate for the first six months of the fiscal was robust and healthy.

"GDP growth for second quarter 2018-19 at 7.1 per cent seems disappointing. Manufacturing growth at 7.4 per cent and agriculture growth at 3.8% is steady. Construction at 6.8 per cent and mining at -2.4 per cent reflect monsoon months deceleration," Garg tweeted.

"First half GDP growth is at 7.6% and is quite robust and healthy. Still, the highest growth rate in the World," Garg said in another tweet.

India's GDP at constant prices (2011-12) had grown at 6.3 per cent in July-September quarter of the last fiscal, according to government data released Friday. The GDP growth was 7.7 per per cent in January-March quarter while it was at 7 per cent in October-December.

The size of the GDP in the second quarter of 2018-19 is estimated at Rs 33.98 lakh crore, as against Rs 31.72 lakh crore a year ago, showing a growth rate of 7.1 per cent, as per a statement by the Central Statistics Office (CSO). India's gross value added (GVA) at constant prices (2011-2012) for second quarter this fiscal is estimated at Rs 31.40 lakh crore, as against Rs 29.38 lakh crore year ago, showing a growth rate of 6.9 percent over the corresponding quarter of previous year, it further said.

The construction sector showed signs of revival by recording a growth of 7.8 per cent as opposed to the 3.1 per cent earlier.

The farm sector too grew at a higher rate of 3.8 per cent in the quarter as against 2.6 per cent a year ago. The mining and quarrying output, however, has declined by 2.4 per cent in the quarter from a growth of 6.9 per cent in year ago period.

Commenting on the slowing economic growth, Economic Affairs Secretary Subhash Chandra Garg saidthat the 7.1 per cent GDP growth for September quarter "seems disappointing", but growth rate for the first six months of the fiscal is robust and healthy.

"GDP growth for second quarter 2018-19 at 7.1 per cent seems disappointing. Manufacturing growth at 7.4 per cent and agriculture growth at 3.8% is steady. Construction at 6.8 per cent and mining at -2.4 per cent reflect monsoon months deceleration," Garg tweeted.

"First half GDP growth is at 7.6% and is quite robust and healthy. Still, the highest growth rate in the World," Garg said in another tweet.