India's annual economic growth rate slumped in the January-March quarter to a nine-year low of 5.3 percent as the manufacturing sector contracted and a fall in the rupee to a record low suggests the economy remains under pressure in the current quarter.
Anubhuti Sahay, an economist at Standard Chartered Bank in Mumbai said the data was shocking.
India's GDP growth rate was much lower than expected and was even below the lowest forecast in a poll that had produced a median of 6.1 percent from predictions ranging between 5.5 percent and 7.3 percent.
The data highlights the unusual degree of weakening of the country's economy, likely driven by poor investment and widening trade gap, said Dariusz Kowalczyk, an economist at Credit Agricole CIB in Hong Kong.
The data also poses a dilemma for policymakers, as they have no fiscal room to stimulate growth, while monetary easing scope is very narrow, at least for now,
The number offered little respite for Prime Minter Manmohan Singh as he struggles to escape a series of political scandals that have paralysed his economic agenda. Economists do not foresee a rapid return to boom times in India.
No comments:
Post a Comment