India's Economy Grows Most Since 2007

India's economy grew at the fastest rate in two and a half years in the second quarter, driven by rising wages and consumer spending.

Gross domestic product increased at an annual pace of 8.8 % in the three months through June, Bloomberg News reported. In the first quarter, the economy grew by 8.6%.

India's low reliance on exports has sheltered it from the worldwide slowdown, allowing it to grow even as major economies such as Japan and the U.S. seek to avoid a double-dip recession.

"In the face of increasing global uncertainties, India is relatively shielded due to its strong domestic demand," Mridul Saggar, an economist at Kotak Securities Ltd. in Mumbai, told Bloomberg News.

The breakneck growth rate may force the country to raise interest rates in a bid to contain inflation. Last week, the Reserve Bank of India said its priority is to control consumer prices.

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