The last three months of 2023 saw the strongest rate of growth in India's economy in 1.5 years, driven by robust manufacturing and building activity that improves Prime Minister Narendra Modi's economic record just months before a national election according to Reuters.
India being the third-largest economy in Asia expanded by 8.4% during the October–December quarter, considerably quicker than the 7.6% growth seen in the preceding three months and far faster than the 6.6% predicted by Reuters polling experts.
According to Indian rating analyst Sunil Kumar Sinha “The ongoing growth momentum is indicative of the Indian economy’s resilience, notwithstanding global headwinds”. He also founded that industrial growth maintained strong trend during the quarter.
With China still failing to recover from the epidemic and the euro zone just avoiding recession, India's economy is among the fastest growing in the world and has regularly outperformed market predictions.
India updated its growth projection from 7.3% to 7.6% for the current fiscal year, which ends on March 31.
Modi's chances might be improved by such a great performance in the final significant economic data release before the May elections, because he has made robust economic growth a central tenet of his campaign trail speeches.
In a social media post Narender Modi said that The December growth “shows the strength of Indian economy and its potential”.
In an effort to help India compete with nations like Vietnam and Thailand, Modi has drastically increased government expenditure on infrastructure and provided incentives to increase the production of phones, electronics, drones, and semiconductors.
For the second consecutive quarter, investment growth above 10%, while the construction industry had growth of over 9%. The manufacturing sector, which has contributed 17% of Asia's third-largest economy over the last ten years, rose by 11.6% year.
According to CareEdge economist Rajani Sinha, “Manufacturing sector growth was supported by lower input costs”.
60% of the GDP is derived from private spending, which increased 3.5% year over year during the quarter after declining 2.4% over the prior three months.
Government spending decreased 3.2% annually, after growing by 1.4% in the preceding quarter.
