India Q3 GDP data Highlights: Indian economy grows by 8.4% in Dec quarter driven by construction, manufacturing sector
1 min read . 01 Mar 2024
India Q3 GDP data Highlights: The Indian economy grew by 8.4% during the October-December quarter of FY 24, according to the GDP data of India for the third quarter of Financial Year 2023-24, released by the Statistics Ministry on February 29.
India’s economic growth during the December quarter has emerged as a surprise for economists who were expecting a contraction in its growth due to a nominal decline in government spending, slow growth of the industrial output, and an uneven monsoon in the third quarter. However, a strong construction and manufacturing sector helped the nation in outperforming the experts' expectations.
According to Mint’s poll, based on the inputs of 17 economists, the GDP growth rate is likely to remain at 6.64% in Q3 FY 24, lower than the 7.6% reported in the previous quarter by the statistics ministry.
Despite strong GDP growth, muted private consumption growth at 3.6 per cent, remained an area of concern in the context of high GDP growth, according to some economists. Hailing the GDP numbers, PM Modi said that his government will continue to strive to keep fast economic growth.
"Robust 8.4 per cent GDP growth in Q3 2023-24 shows the strength of the Indian economy and its potential. Our efforts will continue to bring fast economic growth which shall help 140 crore Indians lead a better life and create a Viksit Bharat!" PM Modi wrote in his recent post on X.
Commenting on the GDP numbers, the Chief Economic Advisor, V Anantha Nageswaran, said that the GDP numbers remained strong. At the same time, he noted that while growth prospects appear bright external factors pose a downside risk.
"So the actual performance of the economy has continued to defy expectations and do better than what many had projected underscoring the fact that a structural transformation of the economy is indeed underway, both in terms of physical infrastructure and digital infrastructure as well as inclusion agenda, boosting the purchasing power of Indian households...," he told reporters during a media briefing on Thursday.
Here are the top highlights of the GDP data released on Thursday, Feb 29, 2024
-India’s GDP grows at 8.4% during Q3 FY24
Beating the market estimates and the Reserve Bank of India’s projections, India’s GDP expanded at the rate of 8.4% during the third quarter of Financial Year 2023-24
-Revised estimate for GDP growth rate in FY 24
According to the second advance estimate of national accounts, the Statistics Ministry, India’s full-year GDP growth rate was fixed at 7.6% from 7.3%. The increased revised advanced estimates aside from the impact of slower growth in consumer spending and government expenditure. In addition to this, the NSO also revised the GDP growth for 2022-23 to 7 per cent against the earlier estimate of 7.2 per cent.
-Manufacturing, construction top performing sectors
India’s GDP growth was fuelled by strong performance of the manufacturing and construction sectors of the country. "Double-digit growth in the manufacturing sector, followed by a good growth rate of construction sector" were responsible for the better-than-expected performance, said the NSO.
The manufacturing sector expanded 11.6% annually in the third quarter, whereas the construction sector grew by 9.5%.
-Agriculture sector emerges as the weakest sector
Falling on expected lines, India’s agriculture sector contracted by 0.8% in the December quarter. The sector had witnessed a growth of 1.6% during the previous quarter. Whereas, the growth rate stood at 5.2% during the same quarter in the previous financial year. The slump in the agriculture sector was the result of poor monsoon conditions and El-Nino impact. However, prospects of healthy rabi harvesting, and expectations of the fading away of El Nino and the forecast of a normal monsoon bodes well for a better-than-normal kharif sowing, said CEA Nageswaran.
-Increase in private consumption, decline in government spending
The GDP numbers revealed a contraction in the government consumption to 3.2 per cent during the Q3 FY 24. The private consumption in the sector rose 3.5% in the December quarter from a year earlier.
-Decline in exports and imports
There was a marginal decline in the share of exports in GDP during the December quarter. The share stood at 22.2% during the quarter, declining from 23.3% in the same quarter of previous year. At the same time, there was a decline in the share of imports in the GDP which stood at 24% during the quarter compared to 27.5% during the previous quarter.
-Marginal decline in Gross fixed capital formation
There was a marginal decline in the gross fixed capital formation (GFCF), an indicator of the level of investments in the country during the December quarter of FY24. However, it picked up pace at 32.4% on an annual basis in the December quarter.
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