India's GDP expanded by 13.5 percent from a year ago in the April-June quarter, its strongest annual expansion in a year, but less than most economists, analysts, and the Reserve Bank of India had anticipated. In comparison to the January to March quarter, the gross domestic product (GDP) was 13.5 percent higherin the three months ending June 30 than it was a year earlier.
The last time GDP saw a higher yearly growth was from April to June of 2021, when it increased by 20.1 percent above the pandemic-depressed level from the previous year.
The quarter from April to June had 0.4 percent growth in the Chinese economy. The RBI predicted earlier this month that the GDP growth rate for the first quarter (April to June) of this fiscal year would likely be about 16.2 percent.
In a study conducted by Reuters and Bloomberg, experts forecast that the economy would expand by 15.2 percent y-o-y in the April-June quarter. Many expets had also predicted that the base effect would cause the Indian economy to develop at a double-digit rate. In their assessment, the State Bank of India forecasted that the GDP will rise at a rate of 15.7 percent from April to June 2022, compared to ICRA's prediction of a growth rate of 13 percent.
According to Kunal Kundu, India Economist at Societe Generale, "the strong June-quarter real GDP growth print of 13.5 percent, albeit slightly below our expectation of 15.0 percent, is primarily a reflection of a rather low statistical base effect and also a reflection of pent-up demand following the exit from the Omicron wave during the March quarter." "It is also evident that there has been a noticeable shift in the demand for services, particularly those that need extensive engagement. However, there are indications that the economic reopening's tailwind is beginning to wane" he said.
In fact, the government lifting travel restrictions owing to the virus resulted in a rise in domestic demand, especially for the country's massive services economy.
The results show that private investment increased in the April to June quarter as compared to the same period last year by 20.1 percent. During this time, private consumption expanded by 25.9 percent and government spending increased by 1.3 percent. However, it was anticipated that the pace would abruptly slow this quarter and the next two as higher interest rates hurt the economy..
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