India’s Economy Expands 7.6%

India’s economy grew at the slowest pace since 2004 last quarter, increasing pressure on the central bank to cut interest rates., 11/28/2008 8:59:32 AM

Asia’s third-largest economy expanded 7.6 percent in the three months to Sept. 30 from a year earlier, after a 7.9 percent gain in the previous quarter, the statistics office said in a statement in New Delhi today.

Governor Duvvuri Subbarao may have to deepen the rate cuts he started last month to support growth in India’s $1.2 trillion economy as the world sinks into recession. Reducing borrowing costs would also shore up investor confidence after terrorist attacks since Nov. 26 killed at least 121 people in Mumbai, the nation’s financial hub.

India’s exports fell for the first time in seven years in October, according to Trade Secretary Gopal K. Pillai, as the U.S., Europe and Japan fell into a recession in the third quarter. Textile exporters may cut about 500,000 jobs by April, according to India’s textile ministry.

Manufacturing increased 5 percent in the three months to Sept. 30 from a year earlier, according to today’s release. Agriculture expanded 2.7 percent and financial services rose 9.2 percent.

India’s Economy Expands 7.6%