GDP surpasses estimates, economy set to expand 7.6% in 3rd quarter

PTC News Desk: Indian Prime Minister Narendra Modi has lauded the nation's GDP growth, which surged by 8.4 per cent in the December quarter, marking a significant milestone for the Indian economy.

In a statement, Prime Minister Modi emphasised the robustness of India's economic performance, stating, "Robust 8.4% GDP growth in Q3 2023-24 shows the strength of Indian economy and its potential. Our efforts will continue to bring fast economic growth which shall help 140 crore Indians lead a better life and create a Viksit Bharat!"

The latest GDP figures surpassed expectations, outstripping economists' forecasts which had anticipated a growth rate of 6.6 percent, as reported in a Reuters poll. This growth, the fastest seen in six quarters, was higher than the revised 8.1 percent growth recorded in the previous quarter.

Robust 8.4% GDP growth in Q3 2023-24 shows the strength of Indian economy and its potential. Our efforts will continue to bring fast economic growth which shall help 140 crore Indians lead a better life and create a Viksit Bharat! — Narendra Modi (@narendramodi) February 29, 2024

A notable contributor to this growth was the manufacturing sector, which expanded by 11.6 per cent year-on-year in the December quarter, surpassing its performance in the preceding three months. Despite the pandemic's challenges, manufacturing demonstrated resilience, underscoring its critical role in India's economy.

However, the agricultural sector, which comprises approximately 15 per cent of India's economy, saw a contraction of 0.8 percent in the December quarter, compared to a growth of 1.6 percent in the preceding quarter.

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Economists anticipate that while economic activity may moderate in the coming quarters, it is expected to remain strong, minimizing the immediate need for policy loosening. Thamashi De Silva, assistant India economist at Capital Economics in London, expressed this sentiment, stating, "Looking ahead, we expect economic activity to moderate over the coming quarters but it should still remain exceptionally strong, which will limit the need for policy loosening for a while."

Upasna Bhardwaj, chief economist at Kotak Mahindra Bank, highlighted the sharp upward revision of the GDP figures against the backdrop of downward revisions to the FY23 figures. Bhardwaj also pointed out stronger investment and net exports in FY24, although consumption remains an area of concern.

The impressive GDP growth underscores India's economic resilience and potential for sustained development, reflecting positively on the government's efforts to bolster economic growth and improve the lives of its citizens.

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(Inputs from agencies)

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