New Delhi: India's economy expanded by 8.4% in the third quarter of the financial year 2023-24, defying economists' expectations of a contraction. The robust growth was primarily driven by strong performances in the manufacturing and construction sectors, with manufacturing witnessing a growth rate of 11.6% and construction expanding by 9.5%.
However, concerns arose over the agriculture sector, which contracted by 0.8% due to poor monsoon conditions and the impact of El Nino. Private consumption increased by 3.5% year-on-year, while government spending contracted by 3.2% during Q3 FY24.
Both exports and imports experienced marginal declines in their share of GDP, with exports accounting for 22.2% and imports for 24% during the quarter. Gross fixed capital formation (GFCF) showed resilience, recording a marginal decline but still picking up pace at 32.4% on an annual basis during the December quarter.
The revised estimates for the full-year GDP growth rate stood at 7.6%, up from the previous projection of 7.3%, attributed to slower growth in consumer spending and government expenditure.
Chief Economic Advisor V Anantha Nageswaran highlighted ongoing structural transformations in the economy, emphasizing advancements in physical and digital infrastructure. Prime Minister Narendra Modi expressed determination to sustain fast economic growth.
Despite the strong GDP growth, concerns remain about external factors posing downside risks. The resilience shown in the Q3 GDP figures offers hope for continued economic momentum amidst domestic and global challenges.
/BI
