Led by gains in the service sector, India's economy expanded by a faster than expected 9.4% in the year ended March, official data showed May 31, beating a government forecast of 9.2%
Analysts had forecast that strong industrial growth and a boom in services such as outsourcing would lift growth to as high as 9.4% despite a series of interest rate hikes in the fourth quarter to tame inflation.
The record growth in India is well behind Asian economic rival China which saw its economy expand by 10.7% in 2006. But central banks' in both billion-plus population nations have warned of overheating in the economies and taken steps to tame demand. In India, analysts have predicted a dip in growth this year linked to tight monetary policy and government directives to banks to be cautious on loans, especially for housing and construction to dim demand for commodities such as cement and steel.
India's central bank has forecast 8.5% growth this year while India's finance minister has said he thinks the economy could expand 9%.
Copyright Agence France-Presse, 2007