Indian economy grew by 13.5% in the first financial year

New Delhi, August 31 (EFE).- The Indian economy grew by 13.5% in the first quarter of the fiscal year (April to June), as private consumption rebounded as fears of the Covid-19 subsided. A huge increase over the past year but less than the expectations of the Reserve Bank of India (RBI, the central bank).

“Gross Domestic Product (GDP) is estimated to show a growth of 13.5% in the first quarter of 2022-23 (…),” the Central Statistics Office (CSO) said in a statement on Wednesday.

The data represents the largest expansion in the Indian economy since India’s GDP grew 20.1% in the first quarter of last fiscal, after a setback caused by successive waves of the coronavirus.

After the decline of the Covid-19 epidemic and the easing of restrictions, the current growth was supported by the increase in private consumption and the return to normality of public-facing sectors such as the hotel industry or transport.

Despite a growth rate of 4.1% in the previous quarter, the expansion of the Indian economy did not meet the RBI’s estimates, which in early August had forecast growth of 16.2% this fiscal.

According to the publishing company’s projections, India’s GDP will increase by 7.2% by the end of the current year.

One of the key challenges to achieving this objective is to mitigate the inflationary pressure that India is currently experiencing, with the tolerance level currently above 6%.

Aiming to reach this limit, the RBI raised interest rates for the third time at the beginning of the month to 5.4%, after a half-point increase to 4.9% last June 8 and a 40 basis point increase to 4.40 last May. %, which changed this key indicator for the first time in a year.

However, the RBI has projected inflation to be 6.7 per cent by the end of the current fiscal. EFE

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