NEW DELHI: India regained its status as the world's fastest-growing major economy in the October-December quarter, surpassing China's growth after a gap of one year, boosted by higher government spending and a pick-up in manufacturing and services.
The Gross Domestic Product (GDP) growth rate for the third quarter (October-December) of the current fiscal (2017-18) stood at 7.2 per cent, government data showed on Wednesday. The latest data signals that the economy in the reporting quarter grew at its fastest pace in five quarters.
The government revised its 2017-18 GDP growth forecast to 6.6 per cent from 6.5 per cent earlier.
The GDP growth rate during the period managed to beat Street expectations. A Reuters survey of 35 economists predicted the data to come at 6.9 per cent.
In the latest quarter, the "government spending was stronger and private consumption demand was robust as well, as seen in strong growth in auto sales," said Abhishek Upadhyay, economist at ICICI Securities PD, ahead of the release of the data. "Recent buoyancy in indicators such as cement output also points to recovery in segments such as construction, and real estate that were hit most from demonetisation," he added.
In another set of data released by the government-- eight core infra sectors grew by 6.7 per cent + in January against 3.4 per cent during the same period last year.
Ahead of the data release, economists polled by Reuters had expressed concerns about the increase in non-performing assets (NPAs) of state-run banks, and said if they are not handled effectively it would hurt economic activity.
Adding to those worries, the second biggest state lender, Punjab National Bank (PNB) this month revealed a loan fraud that's the biggest in India's banking history.
The fraud has cast a shadow over the workings of state-run lenders, already reeling from accumulated bad loans accumulated that are higher than those of banks in most major economies.