India growth slows to 5.3 percent in quarter

NEW DELHI - Agence France-Presse

India’s economic growth eased to 5.3 percent in the July-September quarter, extending a slowdown since the start of the year, data showed Nov. 30. Analysts said a “modest recovery” was looming.

While the growth rate for the quarter to September was in line with most market expectations, it was weaker than the 5.5 percent growth in the April-to-June quarter and well down from 6.7 percent expansion a year ago.

But analysts saw a silver lining in falling global oil prices, growing domestic demand as incomes rise and a recent burst of reforms by the government opening up sectors such as retail and aviation to more foreign investment.

“The conditions for a modest economic recovery are now in place,” said Credit Suisse Robert Prior-Wandesforde, citing expectations of easing interest rates and the government’s recent reform blitz to liberalise the economy. The once-booming Indian economy has slowed sharply this year due to high interest rates, Europe’s debt crisis and sluggish investment caused by domestic and overseas concerns about policy-making and corruption.

Manufacturing performed badly during the last quarter, growing by 0.8 percent from a year earlier. Services such as hotels and transport grew 5.5 percent while finance and property activities jumped by 9.4 percent.