The Indian economy is witnessing a remarkable growth spurt, as it grew at its fastest pace in a year and a half during the last quarter of 2023. The strong growth exceeded 8.4% in the quarter from last October to December, exceeding estimates of 6.6% that It was expected by economists, and exceeded the 7.6% recorded in the previous quarter, driven by strong manufacturing and construction activities.
Sunil Kumar Sinha, economist at India Credit Rating Company, stressed to Reuters the resilience of the Indian economy amid global challenges, highlighting the momentum of sustainable growth.
According to Reuters, India’s continued strong economic performance makes it one of the fastest growing economies in the world, as it has surpassed China’s recovery from the Corona epidemic, and has narrowly surpassed the economic challenges in the euro zone. In response to these numbers, India revised its growth estimates for the current fiscal year (ending next March) to 7.6%, up from the initial estimate of 7.3%.
Prime Minister Narendra Modi, who has made high economic growth a major theme of his speech during election rallies, said in a social media post that “last December’s growth shows the strength and potential of the Indian economy.”
India adopted a set of economic policies, including increasing government spending on infrastructure and incentives for manufacturing sectors, which pushed it to outstanding growth, as it expanded the manufacturing sector, which constitutes 17% of the economy, by 11.6% on an annual basis last December. . Investment growth exceeded 10% for the second quarter in a row, and the building and construction sector witnessed growth exceeding 9%.
Rajani Sinha, an economist at CareEdge, attributed the growth of the manufacturing sector to lower input costs. Private consumption, which represents 60% of GDP, showed signs of recovery with an increase of 3.5% year-on-year, compared to 2.4% in the previous quarter. However, government spending contracted by 3.2% year-on-year, a turnaround from the 1.4% growth recorded in the previous quarter.
Despite the overall positive trend, the agricultural sector, which represents about 15% of India’s $3.7 trillion economy, has faced challenges due to unfavorable monsoon rains. The agricultural sector contracted by 0.8% last December.
