The third quarter of fiscal year 2024 saw a significant increase in real GDP growth, reaching 8.4% year-over-year. This growth was driven by strong private investment spending, which grew by 10.6% year-over-year. The consistent growth in investment over the last four quarters suggests that India is poised for a substantial boost in private capital expenditure, supported by the government’s high capital expenditure spending in recent years.
Despite modest global growth and ongoing geopolitical crises, India’s domestic demand has remained resilient, contributing to its strong overall growth. Private consumption also showed improvement, with a growth of 3.5% year-over-year in the third quarter. This revival in private consumption was indicated by an increase in the index of industrial production of consumer durables and improved sales of passenger vehicles and two-wheelers.
The main dampener on GDP growth in the third quarter was government consumption, which contracted by 3.2% year-over-year, compared to the significant growth of 13.8% year-over-year in the previous quarter. Although export growth slowed to 3.4% year-over-year, a sharper decline in imports at 8.3% year-over-year, driven by falling crude oil prices, led to an improvement in net exports.
From the production side, gross value added (GVA) grew by 6.5% year-over-year, in line with market expectations. Strong growth in manufacturing (11.6% year-over-year) and construction activities (9.5% year-over-year), along with continued positive performance in services (7% year
