Indian growth slips to weakest since 2008

NEW DELHI - Agence France-Presse

An Indian construction worker takes a break from work on a buliding site in New Delhi. Fresh data shows India’s growth slowed to 6.1 percent in the last quarter of 2011.

India’s economy grew by 6.1 percent in the final three months of 2011 -the slowest pace in three years, data showed yesterday, hit by aggressive interest rises and a stumbling global economy.

The figure for the financial third quarter was below market expectations of 6.3-percent expansion and comes on the back of 13 interest rate hikes that have sapped demand and pulled down manufacturing output.

“India’s economy was battered from all angles through the second half of 2011 -from rising interest rates, falling stock prices, a plunging rupee and weaker global demand,” said Moody’s Analytics economist Glenn Levine.

The 6.1 percent year-on-year growth was sharply lower than the 6.9-percent expansion Asia’s third-largest economy booked in the previous quarter.

It also marked the weakest pace of growth since the October to December quarter of 2008, said Credit Suisse senior economist Robert Prior-Wandesforde.

With growth slowing sharply and inflation at two-year lows, analysts forecast the central bank will cut rates at its next meeting on March 15, joining emerging market peers that have moved from fighting inflation to prodding expansion.

Manufacturing output in the three months to December grew just 0.4 percent, down from 7.8 percent in the same period a year ago. 

Agriculture increased by 2.7 percent, down from 11.08 percent a year ago, while mining growth contracted by 3.1 percent in contrast to its 6.1-percent expansion 
a year earlier. 

“Overall this is a weak set of numbers,” Moody’s Levine said.