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GDP grows 5.7% in June quarter, most in 2 years

The Indian economy clocked 5.7% GDP growth in the quarter ended June 2014, government data released Thursday showed, up 1.1% from 4.6% in the quarter ended March 2014. GDP growth for the full financial year ended March 2014 was 4.7% 
The GDP growth beat estimates. A Reuters poll of more than 40 economists had pegged economic growth in the June quarter at 5.3%. 

In the runup to the announcement, other analysts too had revised their growth numbers upwards to above 5%, with Moody’s pegging it at 5.1%, Morgan Stanley at 5.6% and Nomura going as high as 5.9%. 

Economists have been pointing to renewed factory acitivity as signs of green shoots of recovery. Indian manufacturing activity grew at its quickest pace in 17 months in July as order books swelled, marking the ninth consecutive month of expansion according to the HSBC Purchasing Managers’ Index (PMI) survey , compiled by Markit.

At 3.7%, the Index of Industrial Production (IIP) grew for the third straight month in June, albeit at a slower pace than the 5% recorded in May.

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