indian dream
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NEW DELHI -- India's economy grew more slowly than expected in the January-March quarter but still maintained a robust pace, reassuring policy makers that the economy is in good shape despite sustained monetary tightening over the past year.
Gross domestic product expanded 7.8% on-year as growth in mining and manufacturing output weakened, the government said Tuesday. The reading was below the median expectation for 8.2% expansion, according to a poll of 19 economists. The economy had expanded 8.3% in the October-December quarter.
For the full fiscal year ended March 31 the economy grew a provisional 8.5%, in line with the government's projection of 8.6%. That was well ahead of the 8.0% growth in the previous fiscal year, when the economy was shrugging off the effects of the global economic crisis.
Tuesday's reading reflects the resilience of Asia's third-largest economy, with its large domestic market, to issues like the European debt crisis that threaten the growth prospects of many emerging economies. The steady growth will give the Reserve Bank Of India confidence to continue raising interest rates to rein in uncomfortably high inflation.
Government bonds rose on the weaker-than expected print, as investors scaled down their rate hike expectations.
The 7.80% bond maturing in 2021, the most traded in the session, rose to 96.08 rupees, compared with 95.90 rupees before the data.
The benchmark 30-share BSE Sensex gave up some early gains and was up 0.7% at 18,359.60 after hitting an intraday high of 18,417.50.
Economists expect the pace of growth to slow further as the sustained monetary tightening crimp manufacturing activity. But farm output is expected to be strong on the back of normal monsoon rains, limiting any slowdown.
"We will go with the Reserve Bank of India's full year estimate of 8% GDP (gross domestic product) growth in the fiscal year that began April 1," said A Prasanna, an economist with ICICI Securities Primary Dealership.
India GDP Growth Slows - WSJ.com
Gross domestic product expanded 7.8% on-year as growth in mining and manufacturing output weakened, the government said Tuesday. The reading was below the median expectation for 8.2% expansion, according to a poll of 19 economists. The economy had expanded 8.3% in the October-December quarter.
For the full fiscal year ended March 31 the economy grew a provisional 8.5%, in line with the government's projection of 8.6%. That was well ahead of the 8.0% growth in the previous fiscal year, when the economy was shrugging off the effects of the global economic crisis.
Tuesday's reading reflects the resilience of Asia's third-largest economy, with its large domestic market, to issues like the European debt crisis that threaten the growth prospects of many emerging economies. The steady growth will give the Reserve Bank Of India confidence to continue raising interest rates to rein in uncomfortably high inflation.
Government bonds rose on the weaker-than expected print, as investors scaled down their rate hike expectations.
The 7.80% bond maturing in 2021, the most traded in the session, rose to 96.08 rupees, compared with 95.90 rupees before the data.
The benchmark 30-share BSE Sensex gave up some early gains and was up 0.7% at 18,359.60 after hitting an intraday high of 18,417.50.
Economists expect the pace of growth to slow further as the sustained monetary tightening crimp manufacturing activity. But farm output is expected to be strong on the back of normal monsoon rains, limiting any slowdown.
"We will go with the Reserve Bank of India's full year estimate of 8% GDP (gross domestic product) growth in the fiscal year that began April 1," said A Prasanna, an economist with ICICI Securities Primary Dealership.
India GDP Growth Slows - WSJ.com
