India's Economic Growth Slows to 6.7% in April-June

Impact on the Indian Economy

India's economic growth slowed to 6.7% in the April-June quarter, the slowest pace in five quarters, as high inflation and rising interest rates weighed on consumer spending and business investment. Source

The slowdown in growth is a concern for the government, which has set a target of 8% growth for the current fiscal year. The central bank has already raised interest rates four times this year to curb inflation, but the impact of these measures is yet to be fully felt.

Key Factors Contributing to the Slowdown

• High inflation: The consumer price index (CPI) inflation rate rose to 7% in July, its highest level in eight years. Source
• Rising interest rates: The Reserve Bank of India (RBI) has raised interest rates four times this year, taking the repo rate to 5.4%. Source
• Weak consumer spending: Consumer spending has been subdued in recent months due to high inflation and rising interest rates.
• Slowing business investment: Business investment has also slowed in recent months due to uncertainty about the economic outlook.