India's Q2 GDP growth slows due to higher prices

India economic growth slided to 6.3% in its July-September quarter, far slower than the 13.5% growth reported in the previous quarter as distortions caused by Covid-19 lockdowns faded in Asia's third-largest economy.

Government capital spending increased more than 40% during the quarter as the federal government stepped up expenditure on infrastructure from roads to railways, according to official data on Wednesday.

Second-quarter GVA (gross value added) growth expectedly slowed at 5.6%, led by growth in the services sector while manufacturing was a big drag.

Last year, the GDP growth rate was 8.4% in the July-September quarter.

The National Statistical Office (NSO), under the Ministry of Statistics and Programme Implementation, released the data on the quarterly estimates of the July-September period of the current financial year.

The growth rate was above the 6.2% forecast by economists for the quarter, the second of India's 2022/23 financial year, in a poll.

The data elaborated on the expansion of different sectors such as agriculture and manufacturing in the first quarter of this financial year.

Among key sectors, agricultural output rose 4.6% while manufacturing fell 4.3% and the employment-generating construction sector saw a 6.6% annual increase in activity.

Nominal GDP or GDP at current prices in Q2 FY23 is estimated at ₹65.31 lakh crore, as against ₹56.20 lakh crore in Q2 FY22, showing a growth of 16.2% as compared to 19.0% in Q2 FY22.