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India’s GDP Shines in Q3, Grows at 8.4%; FY24 Estimate Pegged at 7.6%

India’s economic resilience shines as Q3 GDP growth reaches 8.4%, exceeding projections. FY24 estimate upgraded to 7.6%, signalling robust recovery.

Surpassing expectations, India’s Gross Domestic Product (GDP) exhibited remarkable growth of 8.4% in Q3 (October-December), as revealed by the National Statistical Office (NSO) data. This impressive surge, up from 8.1% in the previous quarter, defied predictions and showcased the nation’s economic resilience.

Notably, the Q1 and Q2 FY24 figures were also revised upwards to 8.2% and 8.1%, respectively, indicating sustained momentum in economic recovery.

Despite a median poll forecasting 6.6% growth, the actual Q3 performance outstripped expectations. The Reserve Bank of India’s (RBI) conservative estimate of 6.5% was also surpassed, emphasising the unexpected strength of India’s economic rebound.

The FY24 estimate was revised upward to 7.6%, demonstrating confidence in sustained growth. The revised Real GDP for 2023-24 is estimated at ₹ 172.90 lakh crore, with a growth rate of 7.6%, outshining the previous year’s 7.0%.

Analysts express optimism about India’s economic trajectory, with Siddhartha Sanyal, Chief Economist and Head Research at Bandhan Bank, highlighting the potential for the highest growth print in seven years.

Despite initial concerns, the manufacturing sector expanded by 11.6%, dispelling fears of a slowdown. Agriculture, mining, and construction also posted positive growth, contributing to the overall economic resurgence.

On the expenditure side, investment played a pivotal role, recording a substantial 10.6% growth in Q3 FY24. However, private consumption remained subdued with a 3.5% growth.

Industry leaders applaud India’s stellar GDP growth, emphasising the transformative impact of double-digit expansion in manufacturing and robust performance in construction.

As India maintains its position among the world’s fastest-growing economies, experts project sustained growth. Kaushik Das of Deutsche Bank anticipates long-term growth potential, projecting minimum real GDP growth of 6-6.5% and nominal GDP growth of 10-11% over the next two decades.

Chandrajit Banerjee, Director General of CII, asserts that India’s high growth trajectory, supported by structural reforms, positions the country for continued 7%+ growth over the medium term.

India’s Q3 GDP performance underscores its resilience and positive economic outlook, providing optimism amid global economic challenges.

Monika Shanmugam