- GDP growth revised to 5.1% in July-September, 5.6% in April-June
- Official data shows consumer demand, private investment, exports struggle
- Government sees annual growth to rise from 5% in 2019-20 to 6% next year
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The GDP growth rate in the December quarter matched the forecast of analysts in a poll by news agency Reuters, but was below a revised 5.1 per cent growth rate for the previous quarter.
The official data showed consumer demand, private investment and exports all struggling, while higher government spending and an improvement in rural demand lent support.
The figure for the July-September period was revised to 5.1 per cent from 4.5 per cent, according to the statistics ministry statement. Also, the estimate of GDP expansion in the first quarter of 2019-20 (April-June) was revised to 5.6 per cent from 5 per cent.
“The upward revisions in historical data present a complicated picture of growth, even though high frequency data is improving,” said Rahul Bajoria, chief India economist at Barclays. “We reckon a modest recovery continues to stay intact, and will gather some more steam in coming months despite mounting global risks.”
Prime Minister Narendra Modi's government took several steps earlier this month to try to bolster economic growth, including increasing state spending on infrastructure.
But many economists expect the impact of those efforts to be outweighed by the global fallout from the coronavirus epidemic that began in China.
The government is targeting only a slight recovery in growth to 6 per cent for 2020-21, from a more than 11-year low rate of 5 per cent this financial year, far below the level needed to generate jobs for millions of young workers entering the labour market each month.
The Finance Minister had earlier maintained that the fundamentals of the economy remain strong, and that she was not closing the door on additional steps to support it.
The Reserve Bank of India (RBI) had kept the repo rate unchanged at 5.15 per cent in a bid to combat consumer inflation, and projected a GDP growth rate of 6 per cent for the financial year starting April 1 while retaining the estimate for the current financial year at 5 per cent.
India lost its position as the world's fastest-growing major economy last year. The government has set a target of making the country a $5-trillion economy by 2024.