NEW DELHI”•India’s economic growth slowed sharply in the first quarter of the 2016-17 financial year, official data showed Wednesday, missing expectations but raising hopes of an interest rate cut.
Gross domestic product expanded 7.1 percent year-on-year in the three months from April-June, down from the stellar growth of 7.9 percent in the preceding quarter, according to the statistics ministry.
The numbers also fell short of economists’ expectations, with most having predicted a slight slowdown in GDP growth to around 7.6 percent for the quarter.
However, India retained its place as the world’s fastest-growing major economy, with growth having outpaced Asian rival China for more than a year.
“We were hoping for a stronger number,” Shubhada Rao, chief economist at Yes Bank in Mumbai told AFP, adding that sluggishness in the construction and mining sectors had weighed on growth.
“There is room for one rate cut from the central bank,” she said.
India’s rosy GDP figures have drawn questions since the government in January 2015 revised its base year to 2011-12 and introduced new methods of calculating expansion which it said were closer to international standards.