India's economy grows annual 9.2% in Q2

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Thursday, November 30, 2006

India's economy has grown by 9.2 percent in Q2 (July-September) of the fiscal year 2006-07, which was 8.4 percent last year for the same quarter.

The annual growth rate, of Asia's fourth-largest economy, for the quarter is also higher than that of the last quarter's (April-June), which was 8.9 percent. India's annual economic growth has been an average of 8 percent since past three fiscal years.

According to Central Statistical Organisation, real estate and communications-led services recorded an unexpected increase of 13.9% in the quarter.

Manufacturing sectors, which contribute 17 percent in the GDP, have been recorded 11.9 percent growth comparing to last year's 11.3 percent for the same quarter.

Reserve Bank of India hiked repo rate by 0.25 percent to 7.25 percent, keeping the reverse repo rate unchanged at 6% on October 31. Governor Yaga Venugopal Reddy said that production capacity must match with demand pressure in the economy to prevent inflation flaring up.

Finance minister P. Chidambaram said that he was very worried about the higher inflation rate due to supply side constraints.