India’s Gross Domestic Product growth slipped to 5% in the April-June quarter, government data showed on Friday. This is the fourth straight quarter of slower growth and the slowest growth in over six years.
However, the slowdown was in line with what most economist polls had predicted. According to analysts, weak consumer demand and private investments have caused the slowdown.
The manufacturing sector witnessed a sharp decline in the June quarter. It crashed to 0.6% from 3.1% in the previous quarter. It was 12.1% in the corresponding quarter last year. Growth in the agriculture sector declined to 2% from 5.1% a year ago.
Among the services sectors, only trade, hotels, communication segment grew at a fast pace. In the June quarter, it registered a 7.1% growth whereas in the March quarter the growth was 6%. The only sector that registered a massive growth was electricity. It grew 8.6% in the June quarter, from 4.3% in the previous one.
India lost the tag of fastest growing major economy to China in the last quarter of 2018-’19 after the growth rate in its Gross Domestic Product declined to 5.8%. United States-based financial services company Moody’s last week downgraded India’s projected GDP growth rate to 6.2% for 2019-’20.
Last week, Union Finance Minister Nirmala Sitharaman announced a slew of measures to boost the economy, less than two months after presenting the Union Budget. The Reserve Bank of India had also announced last week that it will give the central government Rs 1.76 lakh crore of its dividend and surplus reserves.
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