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India’s economic growth rises to 7.2%


India’s economy grew by 7.2 percent in the third quarter of the financial year, official data showed Wednesday, as the after-effects of high-profile fiscal initiatives faded.

The figures from the Central Statistics Office were a significant improvement on the previous quarter and showed Asia’s third-largest economy is turning the corner after a year dogged by bouts of slower expansion.

Growth bottomed out at 5.7 percent in the three months to the end of June — its lowest rate in three years.

Analysts blamed a sudden ban on high-value banknotes in late 2016 and disruption from a nationwide goods and services tax, which sent shockwaves through India’s $2 trillion economy.

But the impact of these major reforms appeared to recede in the three months to September as the economy bounced back to 6.5 percent, before climbing steadily again in this latest quarter.

The government then promised hundreds of billions of dollars in its annual budget to boost growth and employment in rural areas hit hard by so-called “demonetisation”.

Analysts said these budget measures would help India’s countryside — where most of its 1.25 billion people live — begin to slowly recover.

The government estimates the economy will grow by 7.2-7.5 percent in the second half of the current fiscal year and has said the country is on track to achieve growth of eight percent “soon”.

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