India is the world’s fastest-growing economy and its expansion in the final quarter of last year exceeded expectations, according to International Monetary Fund (IMF) executive director Krishnamurthy Subramanian.
Indian gross domestic product (GDP) grew 8.4% between October and December 2023, representing the fastest pace in six quarters, data published by the country’s statistics service on Thursday showed.
“If you look at the GDP numbers, India’s poised for about 8% growth this year, that makes India easily the fastest-growing economy in the world,” Subramanian said.
The fourth quarter expansion reflects strong private consumption and upbeat manufacturing and construction activity, exceeding Reuters’ estimates of a 6.6% growth.
The Indian government has also raised its GDP growth outlook for fiscal year 2023-24 from 7.3% to 7.6%.
Subramanian attributed Indian economic growth to a shift in the government’s focus toward higher capital expenditure, which has increased significantly over the last few years.
“I do expect the focus on capital expenditure to continue and the fiscal math also is looking very responsible,” he added.
The Indian Finance Ministry presented a preliminary budget in early February, forecasting that the fiscal deficit for the 2025 financial year will decline to 5.1% from the revised 5.8% for 2024. The ministry also highlighted the government’s plan to boost spending on infrastructure.