India's GDP growth zooms to 8.4% in Q3; FY24 growth pegged at 7.6%

India’s gross domestic product (GDP) grew 8.4 percent in the December quarter, data released by the Ministry of Statistics and Programme Implementation on February 29 showed.

At  8.4% year-on-year this is the strongest growth since the second quarter of 2022,  beating forecasts of 6.6%. The NSO, in its second advance estimate of national accounts, pegged the country's growth at 7.6 per cent for 2023-24. It had projected a growth of 7.3 per cent for the current fiscal in its first advance estimates released earlier in January 2024. 

The manufacturing sector soared 11.6% and the farm sector grew 3.8%. Meanwhile, the growth rate for the 2023/2024 fiscal year was revised higher to 7.6% from 7.3%.

Gross value added, which strips out indirect tax and subsidies, is estimated to have grown 6.5% as compared with a revised estimate of 4.8% in the same period last year. 

Key details

Agriculture declined 0.8% in Q3, as compared with 1.6% growth in Q2. 
Mining grew 7.5%, up from 11.1% in the previous quarter. 
Manufacturing expanded 11.6%, as against 14.4% in the prior quarter. 
Electricity and other public utilities expanded by 9% versus 10.5%. 
Construction grew 9.5%, compared with 13.5%. 
Trade, hotels, transport, and communication expanded 6.7% versus 4.5%. 

Relatively strong growth may keep the Reserve Bank of India on guard as it tries to bring inflation down to its 4% target. The central bank has kept interest rates unchanged and stuck to a relatively hawkish policy stance for several months, although some policy committee members argue that keeping borrowing costs too high could stifle economic growth.