India GDP Q4 2023

India: GDP expands the most since April–June 2022 in October–December

GDP growth improved to 8.4% year on year in October–December 2023, from 8.1% in the prior three months and well above market expectations. October–December’s reading marked the fastest expansion since April–June 2022, and will have been one of the strongest readings in Asia.

The upturn reflected improvements in private consumption, fixed investment and exports.

Household spending growth picked up to 3.5% year-on-year in October–December from a 2.4% expansion in July–September. Public consumption dropped 3.2% (July–September: +13.8% yoy). Fixed investment growth accelerated to 10.6% in October–December, above the 11.6% increase logged in the previous quarter. Exports of goods and services growth improved to 3.4% year on year in October–December (July–September: +5.3% yoy). Conversely, imports of goods and services growth softened to 8.3% in October–December (July–September: +11.9% yoy).

On the outlook for the next fiscal year, beginning in April 2024, DBS’ Radhika Rao said:

“[The upcoming fiscal year] is expected to mark the fourth consecutive year when the rate of investment growth outpaces consumption, revisiting the streak last witnessed in 2004-2008. Capex allocations have been priortised with an emphasis on railways, roads & highways, defense and transfer to states […]. Next, consumption is expected to benefit from easing inflation and anticipated reduction in rates, besides better sentiments, and real wage growth.”

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