India posted its slowest economic growth in six quarters yesterday, with output up 7.7 per cent year-on-year, as expansion was hit by the longest stretch of monetary tightening in a decade.

The figure for March-June slightly outpaced market expectations but was just below the 7.8 per cent expansion logged in the previous quarter and sharply down from the 8.8 per cent a year earlier, India’s statistics bureau reported.

“The data clearly shows the economy has slowed appreciably in the last 12 months,” Brian Jackson, senior emerging mar-kets strategist at the Royal Bank of Canada in Hong Kong, said.

“The aggressive monetary policy tightening by the Reserve Bank of India has had an impact on growth. But it won’t stop them raising rates – they’ve already said they’re prepared to accept slower growth to lower inflation.”

Finance Minister Pranab Mukherjee called the data “disappointing” but said he was confident that growth would be “much better” from October, adding that Asia’s third-largest economy was continuing to create jobs.

Analysts had predicted growth at 7.6 per cent for the three months.

Most economists forecast another 25 basis point rate hike in September by India’s Central Bank, which has already raised rates 11 times in 18 months as it struggles to rein in inflation, now near 10 per cent.

“India has raised rates much faster than any other major country but inflation is also a bigger problem than in any other major economy,” D.K. Joshi, chief economist at leading Indian rating agency Crisil, said.