India’s economy grew a forecast-beating 8.9 percent year-on-year in the July-September quarter, data showed yesterday, underscoring the country’s recovery from the global financial crisis.
The fiscal second-quarter boom beat expectations of growth of about 8.2 percent and was propelled by a 9.8 percent jump in manufacturing from a year earlier and an 8.8 percent leap in construction.
Asia’s third-largest economy also got a boost from stronger farm production, which expanded 4.4 percent, thanks to a bountiful monsoon, data from the Central Statistical Organisation showed.
The strong overall growth comes as the country of 1.2 billion people has been aggressively unwinding massive stimulus measures put in place to shield the country from the global slump.
Global investors have been pouring billions of dollars into India, seeking to tap its strong growth, with industrialized economies still struggling to emerge from the downturn.
The South Asian country is the world’s second-fastest growing major economy, behind regional rival China, which logged growth of 9.6 percent year-on-year in the same three-month period.
Surging vehicle sales and growing bank lending have helped to power the strong performance.
Indian Finance Minister Pranab Mukherjee said earlier this month that the government was aiming for double-digit growth in the next couple of years as it seeks to reduce deeply entrenched poverty.
More than 40 percent of Indians still live below the extreme poverty line of US$1.25 a day, compared with 16 percent in neighboring China, according to the World Bank.
While the government expects growth of around 8.5 percent in the financial year to March 31, economists say it may exceed that target if the present trend continues.
The growth rate for the first quarter was revised upwards to 8.9 percent from 8.8 percent.
Economists say the strong performance could prompt the central bank, which has hiked interest rates six times since the start of the year, to press ahead with monetary tightening — the most aggressive in the Asia Pacific region — to curb inflation, which is running at 8.58 percent.
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