India’s economy has experienced impressive growth in the first quarter of the current financial year. Official data released on Thursday reveals that the economy grew by a remarkable 7.8%. This growth can be attributed to the strong performance of the agriculture and financial sectors.
Agriculture Sector Performance
The agriculture sector in India saw a significant growth rate of 3.5% over the three-month period. This is an improvement from the growth rate of 2.4% recorded in the same quarter last year. The government-run National Statistical Office provided this data.
Rise in Financial, Real Estate, and Professional Services
The financial sector, along with real estate and professional services, experienced a growth rate of 12.2% in the April-June quarter. This is an increase from the growth rate of 8.5% recorded during the same period last year. These sectors continue to play a vital role in India’s economic development.
Manufacturing Sector Deceleration
However, there was a deceleration in the growth of the manufacturing sector, which recorded a growth rate of 4.7% in the first quarter of this fiscal year. This is lower than the growth rate of 6.1% recorded a year ago.
Slowdown in Other Sectors
The output in mining, electricity, gas, water supply, and construction also experienced a slowdown during the April-June quarter.
Despite India’s remarkable economic growth, the World Bank warns that there are several challenges that could hinder further progress. Rising borrowing costs, tightening financial conditions, and ongoing inflationary pressures are expected to have an impact on India’s growth this year.
Additionally, the Indian media reports that the erratic monsoon, caused by the El Niño effect warming the eastern Pacific Ocean, is likely to moderate growth in the remaining three quarters of the year.
Future Growth Projection
The World Bank predicts that India’s real gross domestic product growth will moderate to 6.3% in the current financial year, down from an estimated 6.9% in the previous year. Meanwhile, India’s federal bank expects a yearly growth rate of 6.5%.
India remains one of the world’s fastest-growing economies and is expected to continue its growth trajectory despite the various challenges it faces.