India's economy grows slower than expected

A worker in an Indian factory A slowdown in key sectors such as manufacturing has hurt India's growth rate

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India's economic growth rate slowed down in the most recent quarter, according to official figures.

The economy expanded at an annual rate of 4.7% in the three months to December, down from 4.8% in the previous quarter.

The figure was lower than analysts had been expecting.

Asia's third-largest economy has been weighed down by various factors, such as high inflation, a weak currency and a drop in foreign investment.

For the same period in 2012, annual GDP growth was 4.5%.

Analysis

The figures aren't a surprise, but they do show just how the slowdown has cemented itself.

Sure, it's a rate the US and Europe can only dream of - but for a country that once harboured aspirations of double-digit growth, this is pretty bleak.

Manufacturing has been hit especially hard - over the past three months factory output fell almost 2%. And that decline has a human face.

On an industrial estate on the outskirts of Delhi this week, I met a man hanging around in the hope of picking up casual work. He'd lost his job as a temporary labourer and told me people like him were being turned away.

Job creation is a big worry for India with its large, young population. It needs to grow much faster to generate enough employment for its people.

So with elections due in a couple of months - both businesses and ordinary citizens are eagerly watching - with hopes that if a strong government came to power, things could start turning around for this languishing Asian giant.

This is the fifth quarter in a row that India's annual growth rate has been below the 5% mark.

Manufacturing was hardest hit - falling by 1.9% compared with the previous year. The industry is considered one of the country's biggest job creators.

However, hotels, transport utilities and agriculture all showed substantial growth.

"We continue to expect India's economic recovery to remain slow and uneven. Local conditions remain challenging, which is critical as the economy is driven primarily by domestic demand," said Capital Economics economist Miguel Chanco.

Two years ago, India's growth rate stood at about 8%. Economists say the country needs to grow by that much in order to generate enough jobs for the 13 million people entering the workforce each year.

The BBC's Yogita Limaye in Mumbai says the numbers are not good news for the ruling Congress Party, which faces elections in May.

"These figures show that the slowdown really cemented itself in 2013. All four quarters showed growth below 5%," she said.

"One silver lining [for the government] is inflation. Prices had risen steeply in the beginning of the year but over the past two months they have come down."

More than half of the country's 1.2 billion people are under 25. Chand Pandey is one of them. He lost his job at a car parts firm recently and is struggling to find another one.

"Whichever company I go to, they say there's a slowdown and there's less production," he said.

"So they're not hiring any workers right now. It's been two or three months that I've been looking for a job, but I get the same answer everywhere."

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