India Looks Poised To Lose Crown of World's Fastest-Growing Major Economy, Economists Say

India may soon lose its status as the world's fastest-growing major economy, according to economists. 

What Happened: India's growth pace is expected to more than halve this quarter compared to strong double-digit economic growth in the last quarter, Reuters reported citing a poll of economists. The growth will further slow towards the end of the year as interest rates rise.

The report noted that Asia's third-largest economy is grappled with a high unemployment rate and inflation — which has been running above the country's central bank tolerance level all year and would continue to be the same way for the rest of the year.

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"Even as India remains the fastest-growing major economy, domestic consumption will perhaps not be strong enough to drive growth further as unemployment remains high and real wages are at a record low level," said Kunal Kundu, India economist at Societe Generale, told the publication.

Economists expect the country's growth this quarter to slow sharply to an annual 6.2% from a median forecast of 15.2% in the April-June quarter. It is expected to further decelerate to 4.5% in October-December.

Meanwhile, the Indian rupee pulled back from a record low on Monday due to likely dollar sales from the Reserve Bank of India. The local unit had fallen to a record low of INR 80.12 in the first couple of minutes of trade.

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