GDP Expands in India at 5.8%

123jump.com Staff
29 May, 2009
New York City

The GDP expanded at 5.8% in the fourth quarter in India and for the fiscal year ending in March at 6.7%. The annual growth rate was the slowest in the last six years after hitting the peak of 9.6% two years ago. The government spending in rural areas ahead of election surged 12.5% in the quarter.

[R]5:00 PM Mumbai, 7:30 AM New York – The GDP expanded at 5.8% in the fourth quarter in India and for the fiscal year ending in March at 6.7%. The annual growth rate was the slowest in the last six years after hitting the peak of 9.6% two years ago.[/R]

The GDP in India rose at 5.8% in the fourth quarter ending in March. For the fiscal year 2009 the economy expanded at 6.7% rate, the slowest rate in six years.

The fourth quarter GDP expansion rate matched the revised rate in the third quarter from 5.3% to 5.8% according to the Central Statistical Organization.

The expansion was faster than 5.3% growth that most economists had estimated.

Economy has considerably slowed in the last three years from a peak of 9.6% in the fiscal year ending in March 2007 to 9% in March 2008.

Weakness in manufacturing dragged the overall economic growth but the strength in construction and trade and transportation supported the advance. Construction sector increased at 6.8% and wholesale and retail trade and transportation increased at 6.3%.

Agriculture which employs nearly two thirds of population rebounded to 2.7% in the fourth quarter from a contraction of 0.8% in the third quarter ending in December.

The government spending that dominates the social spending category surged at 12.5% in the quarter as the government ramped up its election promise to create jobs in rural areas ahead of the national election.

Indian economy is driven by domestic demand and less by international trade. The international trade is less than 15% of total economic activities in India, lower than 20% for China and Japan.

The Sensex index in India increased 329.24 or 2.30% closed to 14,625.25.