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The economy has failed to create enough jobs for the 1.2 million Indians who enter the job market every month
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Indian Prime Minister Narendra Modi. PHOTO: FILE
MUMBAI: India's economic growth slowed for the fifth consecutive quarter to 5.0 percent, according to government figures released on Friday in another blow to Prime Minister Narendra Modi.
Asia's third-largest economy has also been the slowest in Mumbai in the last five years, owing to weak consumer demand and lack of liquidity.
It was compared to growth of 5.8% in the last quarter and was below forecasts by 5.7% by analysts.
India had already lost its status as the world's fastest growing economy to China, with record unemployment since the 1970s.
"Growth figures are below expectations and reflect a major economic slowdown," said Sameer Narang, chief economist at Bank of Baroda.
Narang said he hoped that the reform measures announced this month by the newly re-elected government of Modi would give a boost to the economy over the coming quarters.
India eases foreign investment rules to boost economic growth
On Wednesday, the Indian government eased restrictions on foreign investment in four key sectors, including coal mining.
The cash-strapped government also received a $ 24 billion gain from the Indian central bank.
Finance Minister Nirmala Sitharaman recently announced several measures in favor of the economy, including the establishment of a $ 10 billion liquidity reserve for banks fearing credit and delisting. An additional levy on equity sales that had scared off foreign investors.
Sitharaman announced the merger of ten public sector banks into four, in the effort to boost lending.
The right-wing Indian government won a landslide victory in elections earlier in May, but has been on the defensive for its management of the economy.
While the economy has grown steadily by about 7% since Modi came to power in 2014, it has not allowed enough jobs to be created for them. 1.2 million Indians who arrive on the job market every month.
Rating agency Moody's has revised its GDP growth forecast for India to 6.2 percent from 6.8 percent previously for 2019-2020.
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