India’s economy grew by 8.2% in the 2023-24 financial year, exceeding analysts’ expectations, government data released on Friday shows. In 2022-23, GDP expanded by 7%.
The robust growth has been attributed to a strong rebound in the manufacturing sector and a continuing surge in construction and services, data shows. Both sectors grew 9.9% during the recently concluded financial year.
This is the fastest pace of economic growth that the world’s most populous country has seen since 2021-22, when the economy was rebounding from the Covid-19 pandemic lockdowns, registering 9.1% GDP growth. It is also higher than the 7.6% growth the government had predicted before the financial year ended.
A higher pace of growth was registered in the fourth quarter (January-March 2024), during which the economy grew 7.8% year-on-year compared with the 6.2% growth recorded a year ago.
India, the fastest growing major economy in the world, has maintained its upward trajectory at a time when many economies have struggled. “We expect economic activity to moderate a bit further over the coming quarters, but India will remain a global outperformer,” Ankita Amajuri, assistant economist at Capital Economics, was quoted as saying by CNN.
In 2022, the South Asian country leapfrogged the UK to become the fifth-largest economy in the world, worth $3.7 trillion. India is now projected to surpass Germany and Japan to become the third-largest economy by the end of the decade.
Sanjeev Sanyal, a member of the Economic Advisory Council to the prime minister, said earlier this month that India will be a $4 trillion economy in 2024-25 and surpass Japan by early next fiscal year to become the world’s fourth largest economy. In April, the IMF estimated that India’s GDP will likely total $4.33 trillion in 2025, compared with Japan’s $4.31 trillion.
The development comes amid ongoing parliamentary elections in India, in which nearly 970 million citizens are eligible to vote in this election. Narendra Modi, who is seeking a third term as a prime minister, came to power in 2014 on several promises, including transforming the economy and turning it into a manufacturing powerhouse. During the current election campaign, Modi has vowed to take India’s economy to third place behind the US and China.
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