Sharp slowdown in Indian GDP: +5.4% between July and September | EUROtoday

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From our correspondent

MUMBAI – The progress fee of the Indian economic system fell greater than anticipated within the quarter from July to September, recording a rise of 5.4%, considerably lower than each the 6.5% anticipated by most analysts and the 7% ventured by the Reserve Bank of India. The determine is the bottom for seven quarters and is considerably decrease than the 6.7% of the April-June quarter, which additionally mirrored a pointy slowdown in public investments coinciding with the lengthy political electoral cycle.

The development of India’s GDP relies upon to a big extent, round 60%, on household consumption and the second quarter (the Indian fiscal yr begins on 1 April) recorded a slowdown which was concentrated above all in city centres. The components that appear to have beneficial higher warning are stubbornly excessive inflation (meals inflation was +10.86% yr on yr in October), the very modest progress in actual phrases of wages and rates of interest which can be nonetheless fairly excessive, at 6 .5 %. In the populous rural areas, the place subsidies are extra detailed and frequent, particularly along side elections, consumption was extra full of life.

Other components which have weighed on the GDP development are the slowdown in progress within the manufacturing sector and within the manufacturing of gasoline and electrical energy. The mining sector even recorded a contraction.

That consumption knowledge would have an effect was broadly anticipated after multiple analysis indicated an uninspiring development in wages. According to Elara Securities, if inflation is taken into consideration, personnel prices of listed corporations not working within the finance sector within the three months from July to September contracted by 0.5% in comparison with a yr in the past.