- Indian economy surprised with 8.4% growth in Q3, outpacing expectations.
- The manufacturing sector led the growth, expanding by 11.6%.
- Agriculture struggled due to uneven rainfall, impacting rural consumption.
The Indian economy had a big surprise in the last quarter of the year, with it growing by 8.4%. That’s way better than what many experts were expecting, who thought it would only be around 6.6%. This growth means India keeps its title as the fastest-growing major economy in the world.
Compared to the same time the year before, this growth is almost twice as fast! The manufacturing, electricity, and construction sectors played a big part in this strong performance.
The latest growth number also means that the estimate for how much the economy will grow for the whole year (FY24) has been bumped up from 7.3% to 7.6%. This is good news, showing that the economy is doing better than expected.
Despite tensions around the world and other countries facing slower growth, India is still doing well. The International Monetary Fund (IMF) even thinks India will do better than big economies like China, the US, and Japan.
In the December quarter, manufacturing, which is about 17% of the economy, grew by 11.6%. That’s a big turnaround from a year ago when it actually shrunk by 4.8%. However, agriculture didn’t do as well, dropping by 0.8% because of uneven rainfall in different parts of the country.
Investments in the country, which is a good sign of how the economy is doing, picked up speed by 32.4% compared to the year before. But it slowed down a bit from the previous quarter.
While the government’s spending slightly went down, household spending also saw a decline by 4.4%. This could be worrying because when people spend less, it can slow down the economy.
Exports, which are goods sold to other countries, also went down slightly compared to the same time last year.
Experts have different opinions about what’s next for the economy. Some think it might slow down because of various challenges like bad crops, weak demand in rural areas, and problems in industries. But others are more optimistic, believing that the government’s efforts to boost investment will keep the economy going strong.
Overall, the rise in the economy’s growth is mainly because of the big growth in manufacturing. The government is also spending more money on projects to help the economy grow.