India posts 5.5% q growth

India's economy accelerated slightly in the April-June quarter, growing by 5.5 percent year-on-year and beating market forecasts, official data showed Friday.

Although the figure topped expectations of 5.3 percent, analysts saw little reason for cheer with growth still stuck around three-year lows. Shares on the Bombay Stock Exchange fell slightly.

Expansion was slightly higher than the 5.3 percent logged in the January-March quarter, but was far below the 8.0 percent of the same period last year, the data from the national statistics office showed.

Growth in consumption -- a measure of consumer spending -- was just 3.9 percent, the lowest in the last 12 quarters, which rang alarm bells for economists.

“The last and largest bastion of growth -- private consumption -- is finally crumbling,” said Ajay Bodke, investment strategy head at Mumbai's Prabhudas Lilladher. “With no pick-up in investments and global economic growth continuing to act as a major headwind for exports, we are truly in for a rough ride for the next couple of quarters,” he said.

Manufacturing output rose by a scant 0.2 percent in the quarter, the first of the 2012-13 fiscal year, while construction output climbed 10.9 percent and farm production was up 2.9 percent year-on-year.

Social spending to support the country's legions of poor soared by 7.9 percent from 3.25 percent growth a year earlier, underscoring worries about the government's huge subsidy bill.

AFP