Indian growth tops expectations

India is the world's second fastest growing major economy

India's economy is growing faster than expected, according to official data, on the back of steady farm growth and strong manufacturing and services.

Gross Domestic Product (GDP) grew 9.3% in the April to June quarter from its level a year earlier.

The figure, from the Ministry of Statistics, had been expected to fall to 8.9% from the 9.1% recorded in the quarter between January and March.

The central bank expects growth of 8.5% for the whole of this year.

Growth picture

"It is slightly higher than expected partly because of higher farm growth and services. Every sector is growing," said Saumitra Chaudhuri, economic adviser at ICRA in Delhi.

Some analysts see the faster growth creating a risk of another rise in interest rates, but Friday's inflation figures appear to make that less likely.

Wholesale price inflation was 3.94% in the 12 months to 18 August, which is the first time that the weekly figure has fallen below 4% since April 2006.

The central bank raised interest rates five times between June 2006 and March 2007.

Behind China, India is the world's second fastest growing major economy.