India's economic growth drops to slowest pace in a decade

31 May 2013

The Indian economy grew at its slowest pace in ten years during the 2012-13 financial year, according to new figures.

Overall the economy grew by five per cent over the year, after a slow start that saw an annual pace of 4.8 per cent in the first quarter.

Up until two years ago, India was recording growth of nine per cent, but in recent months it has seen a sharp drop.

This has been blamed on the slowdown in manufacturing and services sectors. The ministry of statistics recently released figures showing the country's manufacturing sector grew at an annual pace of 2.6 per cent during the latest quarter, while farm output rose by just 1.4 per cent.

The drop in momentum has not come as a surprise. In February, India lowered its growth forecast to five per cent for the year, taking in account the challenges it faces with the slowing economy and a reduced global demand for manufacturing.

By Tony Aynsley

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