India's GDP surges to 7.6% in Q2, led by manufacturing, construction

04 Dec 2023 CW Team

The notable surge in second-quarter GDP is attributed to the stellar performance of the manufacturing and construction sectors. Manufacturing exhibited the highest growth, soaring by 13.9% in Q2, in stark contrast to a 3.8% decline during the same quarter in the previous year. This follows a 4.7% growth in the first quarter of FY24. The construction industry also experienced substantial growth, registering a 13.3% increase compared to 5.7% in Q2FY23, and 7.9% in Q1FY24.

Additionally, the electricity, gas, water supply, and other utility services sector displayed a robust growth of 10.1%, surpassing the 6% recorded in Q2FY23 and the 2.9% in Q1FY24.

Contrarily, the agriculture industry exhibited a more moderate growth rate of 1.2% during the July-September quarter, compared to the 2.5% growth observed a year ago and the 3.5% in the first quarter of the current fiscal year.

The MPC had initially forecasted a 6.5% growth in second-quarter GDP, but RBI Governor Shaktikanta Das anticipated a positive surprise, stating, "Looking at the momentum of economic activity, looking at a few early indicators, I can say that the second-quarter GDP number, as and when it is released, at the end of November, will probably surprise everyone on the upside."

For the entire fiscal year 2023-24, the RBI projects India's GDP growth at 6.5%, while S&P, in a report titled "China Slows India Grows," anticipates a growth rate of 6.4%. Looking ahead to the next fiscal year, FY25, S&P projects India's GDP to grow at 6.9%.

Earlier in the week, government data indicated a substantial 12.1% increase in the output of eight key infrastructure sectors in October 2023, compared to a mere 0.7% expansion a year ago. With the exception of fertilisers, all sectors demonstrated healthy production growth in the reviewed month.

The latest government data reveals that India's Gross Domestic Product (GDP) experienced a robust growth of 7.6% during the July-September quarter, surpassing last year's 6.2%. This significant uptick exceeds the Reserve Bank of India's Monetary Policy Committee (MPC) projection from the previous month. In the initial quarter of the fiscal year 2023-24, India's GDP expanded by an impressive 7.8%. The notable surge in second-quarter GDP is attributed to the stellar performance of the manufacturing and construction sectors. Manufacturing exhibited the highest growth, soaring by 13.9% in Q2, in stark contrast to a 3.8% decline during the same quarter in the previous year. This follows a 4.7% growth in the first quarter of FY24. The construction industry also experienced substantial growth, registering a 13.3% increase compared to 5.7% in Q2FY23, and 7.9% in Q1FY24. Additionally, the electricity, gas, water supply, and other utility services sector displayed a robust growth of 10.1%, surpassing the 6% recorded in Q2FY23 and the 2.9% in Q1FY24. Contrarily, the agriculture industry exhibited a more moderate growth rate of 1.2% during the July-September quarter, compared to the 2.5% growth observed a year ago and the 3.5% in the first quarter of the current fiscal year. The MPC had initially forecasted a 6.5% growth in second-quarter GDP, but RBI Governor Shaktikanta Das anticipated a positive surprise, stating, Looking at the momentum of economic activity, looking at a few early indicators, I can say that the second-quarter GDP number, as and when it is released, at the end of November, will probably surprise everyone on the upside. For the entire fiscal year 2023-24, the RBI projects India's GDP growth at 6.5%, while S&P, in a report titled China Slows India Grows, anticipates a growth rate of 6.4%. Looking ahead to the next fiscal year, FY25, S&P projects India's GDP to grow at 6.9%. Earlier in the week, government data indicated a substantial 12.1% increase in the output of eight key infrastructure sectors in October 2023, compared to a mere 0.7% expansion a year ago. With the exception of fertilisers, all sectors demonstrated healthy production growth in the reviewed month.