India's GDP grew at 13.5% in Q1 FY23, fastest in a year

India's Gross Domestic Product (GDP) in the first quarter (April-June) of the fiscal year grew by 13.5 per cent, as against a 20.1 per cent growth seen during the same period last year, data released by the National Statistical Office (NSO) showed on Wednesday.

Many analysts had projected the Indian economy will expand at a double-digit growth rate due to the base effect.

According to rating agency Icra, the GDP was likely to grow at 13 per cent while the State Bank of India in its report, projected the growth rate at 15.7 per cent for April-June 2022.

Earlier this month, in its monetary policy meeting, the Reserve Bank of India (RBI) said that the GDP growth rate is likely to be around 16.2 per cent in the first quarter of this fiscal year.

China registered an economic growth of 0.4 per cent in April-June 2022.

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News agency Reuters reported that the pace of growth is seen moderating going forward due to global recession fears and rising borrowing costs. The RBI has raised the benchmark policy rate by 140 basis points in three rates moves since May and has vowed to do more to bring inflation under its 6 per cent target ceiling.

“We are seeing signs of waning of the intensity of tailwind generated by economic reopening,” Reuters quoted Kunal Kundu, an economist with Societe Generale GSC Pvt, as saying. “Add rising borrowing cost to benign domestic consumption prospects, and business investment could be potentially underwhelming,” Kundu added.

Meanwhile, private investment during April-June increased 20.1 per cent from a year ago, data show. Government spending rose 1.3 per cent while private consumption was up 25.9 per cent.

(With inputs from PTI, Reuters)