India’s GDP Grows at 8.4% in 3rd Quarter, Fastest in 1.5 Years | India Business News

NEW DELHI: The economy grew at its fastest pace in six quarters in the three months to Dec, led by robust manufacturing and construction sector growth. The strong growth has boosted govt’s track record of handling the economy against the backdrop of global challenges ahead of general elections.
Data released by National Statistical Office (NSO) showed the economy grew by a faster-than-expected 8.4% in Oct-Dec, higher than upwardly revised 8.1% in the previous quarter and above 4.3% in the third quarter of 2022-23.Now, NSO estimates 2023-24 GDP growth at 7.6%, above earlier estimate of 7.3%, making India world’s fastest-growing major economy.

NSO has revised upwards the second and first quarters while revision to 2022-23 quarters also led to a favourable effect. GDP growth for FY23 was revised to 7% from 7.2%. The Q3 growth was also higher than RBI’s projection of 6.5%. The central bank had revised its projection to 7% for 2023-24 from 6.5%.

Growth broad-based, driven by investment demand: Finmin
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,” PM Modi posted on microblogging site X after the data release.
The finance ministry said India continues to be an outlier and remains the fastest-growing major economy in the Oct-Dec 2023 quarter and it builds on the momentum of the previous quarter. It said growth was broad-based, driven by robust investment demand.
The manufacturing sector recorded a double-digit growth of 11.6% compared to a contraction of 4.8% in the year-ago quarter, while construction grew 9.5% compared with similar expansion in the year earlier period. The farm sector remained a worry with a contraction of 0.8% compared to an expansion of 5.2% in the third quarter of the previous year, largely impacted by patchy monsoon rains.

Public administration, defence and other services grew by 7.5% during the Dec quarter, compared to a growth of 3.5% in the year-ago quarter. Overall, the services sector witnessed some moderation. It grew 7% in the Oct-Dec quarter, slightly slower than 7.2% in the third quarter of last year but higher than 6% in the second quarter.
“In terms of the expenditure side, as expected growth has been mainly led by strong capex by govt. Consumption growth has remained feeble. Going forward, the most critical aspect to watch out for will be a broad-based improvement in consumption growth. The other critical aspect would be a meaningful improvement in private investment. Overall robust GDP growth will be sustainable only when there is a meaningful improvement in consumption and private investment,” said Rajani Sinha, chief economist at rating agency CareEdge.