India's Q3 Economic Surge: Construction And Manufacturing Sectors Propel 8.4% Growth

The key highlights from the GDP data include:

India's GDP surged by 8.4% in Q3 FY24, surpassing market estimates and RBI projections. The second advance estimate revised India's full-year GDP growth rate to 7.6% from 7.3%, indicating an upward adjustment despite challenges in consumer spending and government expenditure. Additionally, the NSO revised GDP growth for 2022-23 to 7%. Driving GDP growth were the manufacturing and construction sectors, experiencing double-digit expansion in manufacturing (11.6%) and solid growth in construction (9.5%). The agriculture sector contracted by 0.8% in Q3 FY24, primarily due to adverse weather conditions, particularly a poor monsoon and El Niño impact. While private consumption increased by 3.5%, government consumption contracted by 3.2%, indicating a mixed picture in domestic demand. Both exports and imports as a share of GDP saw marginal declines during the December quarter. Notably, imports experienced a more significant decrease compared to exports. Gross fixed capital formation (GFCF) saw a slight decline but picked up pace at 32.4% on an annual basis in Q3 FY24, signaling ongoing investment activities.

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Updates on GDP data highlighted a 3.2% contraction in government expenditure and predicted increases of 1.5% in exports in rupee terms and 10.9% in imports on an annual basis.

Overall, India's Q3 GDP data for FY24 underscored resilience and growth momentum, driven by key sectors despite challenges in agriculture and government spending.