New Delhi: The government will announce the pace of economic growth in the second quarter as the highest interest rates in seven years cool consumer demand for homes, cars and appliances. India’s economy expanded 8.8% in the first quarter (Q1) ended March. The Central Statistical Organisation will release the report at midday on 29 August here. The economy is expected to expand 7.7% in the 12 months to March, the slowest pace in four years.
“Our forecast range for the economy has been between 8% and 9% and developments since March suggest the likelihood of it being near the bottom of that range is higher now,” Arvind Virmani, finance ministry’s chief economic adviser, had said on 18 August.
Expert view: Arvind Virmani, finance ministry’s chief economic adviser, had hinted last week that the economy is likely to grow at 8% rather than 9% for the quarter ended June. Photograph: Harikrishna Katragadda / Mint
Infosys Technologies Ltd, the country’s second largest software services provider, will hold a meeting with analysts in Chennai on 27 August. The company, based at Bangalore, on 11 July had reported Q1 profit growth slowed after widening credit market losses prompted US banking clients to delay orders.
India’s benchmark Sensex has been on a downtrend since the beginning of this year. The index, however, rose 0.34% to 14,450.35 points on the Bombay Stock Exchange on Monday. State Bank of India, the country’s largest lender by assets, gained 0.83%. ICICI Bank Ltd, the second biggest, rose 1.76%.
A government report last week showed inflation quickened to 12.63% in the week to 9 August, the fastest pace in 16 years, increasing the likelihood that the Reserve Bank of India (RBI) will raise interest rates for a fourth time since June. Thoug h crude oil fell on Monday, it had posted its biggest weekly increase in more than two months last week.
RBI raised its repurchase rate to 9% from 8.5% on 29 July, the third increase in two months. It also increased the cash reserve ratio to 9% from 8.75%.
(Pooja Thakur and Anoop Agarwal in Mumbai and Harichandan Arakali in Bangalore contributed to this story.)