INDIA’S ECONOMY grew at its fastest in six months in the quarter through March thanks to government and consumer spending, which was in line with expectations and likely to keep the central bank on its path of gradual monetary tightening.

The 8.6 per cent expansion in the fourth quarter of the fiscal year 2009/10 was in line with a median forecast of 8.7 per cent in a Reuters poll, and lifted the annual growth rate for the full fiscal year to 7.4 per cent.

“Investment and manufacturing have powered the expansion so far, with consumption and services still lagging the advance,” said Frederic Neumann, who is a regional economist at HSBC in Hong Kong. – (Reuters)