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NEW DELHI: India's economy grew nine percent in the last fiscal year, second only to China among the world's major economies, helped by unexpectedly high fourth-quarter expansion, data showed on Friday.
The annual gross domestic product (GDP) growth to March 2008 was down from the previous year's 9.6 percent but above a government projection in February of 8.7 percent.
The figure marked the third straight year that the economy grew nine percent or more. It came despite aggressive monetary tightening to tame inflation running at nearly eight percent.
Inflation is causing acute concern to the Congress-led government ahead of general elections due within a year.
Economic growth was 8.8 percent in the fourth quarter to March as interest rates at six-year highs hit consumer demand and investment. But the figure was still far better than analysts' forecasts of 8.1 percent.
"One Asian country where we didn't expect to see GDP surprise the consensus on the upside" in the final quarter was India, said JP Morgan analyst Rajeev Malik, who rated the performance was "not bad by any standards."
But he raised the possibility the economy's strength might prompt India's central bank to move sooner than expected to further tighten monetary policy.
"The risk is that it comes early and is more aggressive than we assumed," said Malik.
Most private analysts expect the economy to slow in the current financial year to around seven to eight percent growth.
They cite a central bank wrestling to contain inflation, climbing global commodity prices and mounting investor risk aversion amid worldwide financial turbulence.
India's growth is still turbo-charged by anaemic Western standards, but the figure is well shy of the double-digit levels economists say is needed to rescue hundreds of millions of Indians from crushing poverty.
Pessimism about growth this year was fed by data earlier showing annual industrial output in March grew by three percent – its smallest rise in six years.
- AFP/so
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