Indian economic growth likely slowed to 7.1% in April-June quarter: Reuters poll

Indian economic growth is projected to have slowed to 7.1% in the April-June quarter, according to a Reuters survey of economists, according to the <source>. This decline was attributed to less robust private investment, despite being bolstered by consumer spending and government expenditure. The Goods and Services Tax rate reduction and income tax cuts in the previous year likely helped maintain household disposable income and demand, mitigating the effects of rising inflation, reported the <source>.

However, economists anticipate the recent surge in private investment to be short-lived (<source>). Crude oil prices exceeding $90 a barrel and potentially rising further present challenges for India, the world's third-largest economy, due to higher fuel and transport costs impacting households and businesses already cautious about investing amid geopolitical uncertainty (<source>).

Economists believe the private investment recovery is nascent and yet to become more robust, widespread, and enduring (<source>). The conflict may have made private investors more cautious about expansion plans in certain sectors (<source>). Despite the outlook for growth, business activity remained robust during the April-June quarter, though momentum slightly tapered in June (<source>).

Confidence among firms declined to a five-month low due to economic conditions and a weaker rupee, according to the <source>. India's exports, which rose over 11% year-on-year during the quarter, may offer additional support to growth, some economists suggested (<source>). The Reserve Bank of India is expected to maintain interest rates unchanged for at least six months, as per the poll's forecasts (<source>).