India’s Economic Growth Seen Slowing to 7.1% in April-June Quarter
Reuters poll points to moderation from the previous quarter as subdued private investment, higher crude costs and geopolitical uncertainty weigh on the outlook.
NEW DELHI, Aug 25: India’s economic growth is expected to have moderated to 7.1% in the April-June quarter, according to a Reuters poll of 58 economists, as weaker private investment offset continued strength in consumer spending and government expenditure.
The projected expansion compares with 7.8% growth recorded in the previous quarter. Despite the expected slowdown, India is likely to retain its position as the fastest-growing major economy.
Economists said domestic demand has remained relatively resilient, helped by tax reforms that have supported household disposable income and spending. Exports also provided support, recording growth of more than 11% during the period.
However, private investment remains a concern. Analysts warned that rising crude oil prices and continuing geopolitical tensions could weigh on corporate spending and economic activity in the coming quarters.
The Indian rupee has also faced pressure, losing more than 6% against the US dollar this year. A weaker currency, combined with higher fuel and transportation costs, could raise expenses for businesses and households.
Economists expect growth to moderate further to around 6.6% in the next quarter and 6.5% thereafter, putting full-year expansion at an estimated 6.7%, broadly in line with the Reserve Bank of India’s forecast.
The central bank is expected to keep its policy rate unchanged for at least the next six months as policymakers balance growth concerns against inflationary pressures.
