India's economy grew faster-than-expected in the three months to June and at the strongest pace in two years, preliminary figures from the Central Statistics Office revealed Friday.
Gross domestic product grew 5.7 percent in the April to June quarter,
which exceeded economists' forecast for 5.5 percent expansion. The
economy grew 4.6 percent in the previous three months.
All main economic sectors recorded growth during the quarter with the
services sector logging the biggest increase of 10.4 percent. That was
followed by 10.2 percent growth in output in the utilities sector.
The crucial manufacturing and mining sectors rebounded during the June
quarter, marking gains of 3.5 percent and 2.1 percent, respectively.
Construction sector output rose 4.8 percent. Farm output increased 3.8
percent.
The Reserve Bank of India expects that economic growth in the range of 5-6 percent can be sustained in 2014-15.
The country's newly formed government, led by Prime Minister Narendra
Modi, aims to achieve growth in the range of 7-8 percent within the next
three to four years and bring the fiscal deficit down to 3 percent of
the GDP.
However, if risks relating to the global recovery, the monsoon and
geo-political tensions intensify, the balance of risks could tilt to the
downside, the central bank warned earlier this month while leave key
interest rates unchanged.
Service sector activity in India expanded for the third consecutive
month and manufacturing growth hit a seventeen-month peak in July, the
latest purchasing managers' survey showed.
Mr Modi has promised to make it easier to do business through speedier
clearances and stable tax policies, allowing investors in Asia's
third-largest economy hope of a rosier future after years of low growth
and high inflation.
Mr Modi has to spur the economy to far higher rates of growth in order
to provide jobs for the increasing numbers of young people joining the
work force, and lift millions of Indians out of poverty.
