Economic growth data disappointing, says Pranab

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Expressing disappointment over the slowdown in the economic growth that fell to 7.7 per cent in the first quarter this fiscal, Finance Minister Pranab Mukherjee on Tuesday said the slump was due to uncertainties in the US and European economies.

"No doubt this is disappointing," Mukherjee said while reacting on the first quarter data.

India's gross domestic product (GDP) growth slumped to 7.7 per cent in the April-June 2011 period, the lowest in the past six quarters. The economy had grown by 8.8 per cent in the April-June quarter of 2010-11.

The finance minister said the decline in economic growth was mainly due to uncertainties in the global economies, especially in the US and European countries.

"If you look at the overall international scenario and particularly Europe and US, there the performance is unstable and recovery is very poor," Mukherjee told reporters.

The finance minister expressed hope that the growth rate would pick up in the coming quarters.

"We shall have to work very hard - government, industry - and I am confident that our workers and farmers would make their contribution in ensuring growth with inclusion," Mukherjee said.

In his budget speech in February, Mukherjee had set a growth target of 9 per cent (plus-minus 0.25 per cent) for the current fiscal. However, the Prime Minister's Economic Advisory Council recently revised the growth projection downwards at 8.2 per cent.

Reacting on the first quarter data, Finance Minister's Chief Economic Advisor Kaushik Basu said the growth rate was expected to pick up in the second half of 2011-12.

"You should not get your hopes too high in the immediate next quarter which is the second quarter of the year. But I do expect better data in third and the fourth quarter, especially the fourth quarter, to do quite a substantial pickup," Basu said.