New Delhi: Amid a flurry of news about the Indian economy, a report on Sunday showed the countrys biggest economy is growing at its slowest pace in years, in part because of the steep price rises.
The growth of the Indian rupee, the benchmark against which other currencies are measured, has slowed to 3.2 percent, from 3.8 percent a year ago, the National Bureau of Statistics (NBS) said in a report.
The rate is the lowest since May 2016, when the currency lost a quarter of its value against the US dollar.
Inflation is running at just 2.5 percent, its lowest since October, and India has experienced its slowiest growth rate in a decade, the NBS said.
At the same time, India’s economic output is growing faster than in any other country, while growth in services has slowed sharply.
The NBS is expected to release its quarterly report on Tuesday.
The growth rate is also far below the average of 4.5 to 5 percent seen over the past three years, according to the NPS, which tracks inflation and output.
“We expect inflation to remain low in the coming quarters, but it may be a little slower than expected,” said Manish Gupta, senior economist at IHS Markit.
“Inflation has been the biggest driver of the growth rate, which was below 3 percent for the past 12 months, as it has been outpacing the growth of other sectors.”
Indian inflation rose to 5.3 percent in the third quarter, the highest since the year 2000.
India’s economy has shrunk by 4.3 million jobs since March 2017, and its growth slowed to just 1.4 percent in May, its slowgest rate since the second quarter of 2019.
Growth in manufacturing fell by 0.3 percentage points in the three months to June, and growth in construction fell by 1.5 percentage points, according the NSS.
The economy contracted in July, the second straight month of contraction, as the government struggled to get its fiscal deficit down.
Despite the slow growth, India has a strong credit rating and is forecast to reach its long-term economic growth target of 6.2 to 6.5 per cent.