Analyzing the Third Quarter Growth of Fiscal Year 2024

India’s Economy Shows Resilience with Strong Growth in Third Quarter of Fiscal 2024

In a positive turn of events, India’s real GDP growth surged to 8.4% year-on-year in the third quarter of the current fiscal year. This growth was primarily driven by a significant increase in private investment spending, which grew by 10.6% year-on-year, signaling a potential boost to the private capital expenditure cycle in the country.

Despite challenges posed by modest global growth and ongoing geopolitical crises, India’s domestic demand remained resilient, with private consumption improving to 3.5% year-on-year in the same period. The revival in consumer durables production and increased sales of passenger vehicles and two-wheelers contributed to this growth in private consumption.

However, government consumption contracted by 3.2% year-on-year in the third quarter, marking a significant decline from the previous quarter. On the trade front, while export growth slowed to 3.4% year-on-year, a sharper decline in imports (8.3% year-on-year) due to falling crude oil prices helped improve net exports overall.

From the production side, gross value added (GVA) grew by 6.5% year-on-year, driven by robust growth in manufacturing (11.6% year-on-year) and construction activities (9.5% year-on-year). The services sector also performed well, with a 7% year-on-year growth. However, the agriculture sector saw a contraction of 0.8% year-on-year, impacted by temporal rains affecting crop production.

The overall outlook for India’s economy in the third quarter of fiscal 2024 appears positive, with strong growth in key sectors and indications of a potential uptick in private investments. As the country navigates through global challenges, the resilience of its domestic demand and the performance of key sectors bode well for future economic growth.