The Gross Domestic Product (GDP) of India increased by 13.5 percent in the first quarter (April-June) of the fiscal year, compared to a 20.1 percent increase in the same time previous year, according to figures issued by the National Statistical Office (NSO) on Wednesday.
Because of the base effect, many analysts predicted that the Indian economy would grow at a double-digit rate.
According to rating agency Icra, GDP was predicted to rise at a pace of 13% in April-June 2022, while the State Bank of India projected a rate of 15.7% in their assessment. The Reserve Bank of India (RBI) stated earlier this month at its monetary policy meeting that the GDP growth rate in the first quarter of this fiscal year is projected to be around 16.2 percent. In April-June 2022, China saw 0.4% economic growth.
According to Reuters, the pace of growth is expected to slow in the future due to global recession fears and rising borrowing prices. Since May, the RBI has lifted the benchmark policy rate by 140 basis points in three rate hikes and has pledged to do more to keep inflation within its 6% target ceiling.
“We are seeing signs of waning of the intensity of tailwind generated by economic reopening,” said Kunal Kundu, an economist at Societe Generale GSC Pvt, according to Reuters. “Add rising borrowing costs to benign domestic consumption prospects, and business investment could be potentially underwhelming,” Kundu noted.
Meanwhile, data reveal that private investment climbed 20.1 percent year on year in April-June. Government spending increased by 1.3%, but private consumption increased by 25.9%.