Economy grew by an impressive 8.8 per cent during the quarter ended June on the back of robust manufacturing growth.

However, certain sectors like financial services restrained the growth in economy, which had recorded 6 per cent growth rate in April-June 2009-10.

Agriculture and allied activities grew by 2.8 per cent, higher than 1.9 per cent in the year-ago period, but it is nowhere between the target of four per cent pegged by the government in the medium term.

Manufacturing expanded by strong 12.4 per cent in April-June, 2010 against a mere 3.8 per cent growth rate in the same period last year.

Construction too grew by 7.5 per cent compared to 4.6 per cent.

Among services, financial, insurance and real estate services expanded by just 8 per cent, against a growth rate of 11.8 per cent in the year-ago quarter, while community social and personal services growth slowed down to 6.7 per cent, against 7.6 per cent a year ago.

However, trade, hotels and communication services rose by 12.2 per cent, against 5.5 per cent during April-June 2009.

The government expects economy to grow by 8.5 per cent this fiscal. Though the GDP numbers for the April-June quarter are higher than that of 8.6 per cent in the previous quarter, they lag expectations of 8.9-9.4 per cent forecast by various experts.