India GDP growth beats forecasts

Figures show Asia's third largest economy grew by 7.9 per cent in last quarter.

    Private consumption increased 5.6 per cent from the same quarter a year ago [GALLO/GETTY]

    India's expansion, the strongest quarterly performance since early 2008, was bolstered by rising industrial production and government stimulus measures designed to combat the global downturn.

    The figures show manufacturing in India surged by 9.2 per cent while government spending on roads and other projects climbed by 12.7 per cent.

    'Significant improvement'

    Government spending in total rose 26.9 per cent, while private consumption increased 5.6 per cent, in constant currency terms, from the same quarter a year ago.

    The growth comes despite the worst summer monsoon since 1972 hitting India's agricultural sector - growth in agriculture, forestry and fishing was just 0.9 per cent for the quarter, the figures showed.

    While less than 20 per cent of India's gross domestic product comes from agriculture, some 65 per cent of the population relies on farming for their livelihood.

    Montek Singh Ahluwalia, the deputy chairman of India's planning commission, said the rise had caused the board to increase its estimates for the year to March 2010, although he did not say by how much.

    "In the rest of the year we could see [more] significant improvement than expected," he told reporters in New Delhi.

    Regional rivalry

    Figures for the Asian region as a whole have been strong as countries pull out of the financial downturn.

    Regional rival China grew by 8.9 per cent in the third quarter, the fastest pace in a year.

    Analysts said the strong Indian numbers would fuel debate over when the central bank should raise benchmark borrowing rates as it seeks to fight inflation and keep the economic resurgence on track.

    But economists said the odds were still tilted in favour of interest rates remaining on hold until January while the central bank waits to ensure the strong growth is entrenched.

    During the July-September quarter last year India saw a growth rate of 7.7 per cent. Growth for the fiscal year ending March 31 dropped to 6.7 per cent, its worst since 2003.

    SOURCE: Agencies


    Interactive: How does your country vote at the UN?

    Interactive: How does your country vote at the UN?

    We visualised 1.2 million votes at the UN since 1946. What do you think are the biggest issues facing the world today?

    'We were forced out by the government soldiers'

    'We were forced out by the government soldiers'

    We dialled more than 35,000 random phone numbers to paint an accurate picture of displacement across South Sudan.

    Interactive: Plundering Cambodia's forests

    Interactive: Plundering Cambodia's forests

    Meet the man on a mission to take down Cambodia's timber tycoons and expose a rampant illegal cross-border trade.