India’s GDP grows 8.7% as virus curbs, Ukraine war add hurdles

India’s economy grew slower than estimated last year, as virus curbs dragged activity while the war in Europe added a new inflation hurdle to recovery.

Gross domestic product in the year to March 2022 grew 8.7 per cent, according to data released by Statistics Ministry on Tuesday. That’s in-line than a median estimate in a Bloomberg survey and slower than the 8.9 per cent expansion projected by the Statistics Ministry three months ago.

In the January-March quarter, the economy expanded 4.1 per cent, a performance that will mark the low point of the year.

Asia’s third largest economy had just begun recovering from the pandemic-induced slump when a surge in omicron cases in January brought back some of the virus-related restrictions. The war in Ukraine, in February, further added to its woes, pushing up commodity prices and squeezing supplies further.

Earlier this month, elevated prices forced India’s central bank to hike rates by 40 basis-points in an off-cycle meeting.

Governor Shaktikanta Das, who is due to next review monetary policy June 8, has signaled more interest rate increases to tame inflation, a move that may hurt demand further.