India 1Q22 GDP slowed to 1-year low

• India’s economic growth slowed to the lowest in a year in 1Q22, hit by weakening consumer demand amid soaring prices that could make the central bank’s task of taming inflation without harming growth more difficult.
• GDP grew 4.1% y/y in 1Q22, government data showed, in line with a 4% forecast by economists in a Reuters poll, and below 5.4% growth in 4Q21 and growth of 8.4% in 3Q21.
• The economy’s near-term prospects have darkened due to a spike in retail inflation, which hit an eight-year high of 7.8% in Apr 22. The surge in energy and commodity prices caused partly by the Ukraine crisis is also squeezing economic activity.
• “Inflation pressures will remain elevated,” V. Anantha Nageswaran, chief economic adviser at the finance ministry, said after the data release, adding that the risk of stagflation – combining slow growth and high inflation – was low in India.
• Garima Kapoor, an economist at Elara Capital, said a slowdown in global growth, elevated energy prices, a cycle of rising interest rates and a tightening of financial conditions would all be key headwinds.
• High-frequency indicators showed supply shortages and higher input prices were weighing on output in the mining, construction and manufacturing sectors, even as credit growth picks up and states spend more.

External Link : https://www.reuters.com/world/india/indias-economic-growth-slows-41-yy-january-march-quarter-2022-05-31/