India’s economy grew 7.8% year-on-year in April-June, exceeding expectations, as strong investment and manufacturing activity offset weakness in mining and consumer-facing services.
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   India’s economy grew 7.8% in the April-June ​quarter, government data showed on Monday, comfortably ‌beating expectations as a surge in investment ​and manufacturing activity offset weakness in ⁠mining and consumer-facing services.

The figure was higher than economists’ expectations of 7.1% year-on-year growth in ‌a Reuters poll, but slower than the revised 8.6% growth in ‌the previous three months.

The Reserve ‌Bank ⁠of India had projected first-quarter ⁠growth at 7%.

While goods and services tax cuts and income tax reductions have boosted consumer demand in ​Asia’s third-largest economy, economists ‌believe that the six-month-long Middle East conflict is keeping companies from investing more in capacity expansion.

Still, credit growth across ‌sectors including farm, industry and services remained ​healthy, according to the RBI’s August bulletin, with the highest loan ⁠growth of 18.3% in over a decade at the end of the June ‌quarter.

Gross value added, a more accurate measure of underlying economic activity, grew 8.2% during the April-June quarter, the data showed. This measure strips out the volatile components of national accounts such as indirect ‌taxes and subsidies.

The manufacturing sector grew at ​9.2% compared with 8.3% in the same period last year, while the ⁠financial services sector grew a robust 12.1% compared ⁠to 8.8%, driven by strong growth in bank credit.

Personal consumption, an ‌indicator of consumption in the economy, rose 7.1% while investment grew nearly ​12%.

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