GDP accelerates in the third quarter, fiscal 2024 estimate revised up
The takeaways
No signs of a slowdown: India’s gross domestic product (GDP) exceeded expectations yet again. Real GDP accelerated to 8.4% on-year in the third quarter (Q3) of this fiscal from 8.1% in the second quarter. Growth of the past two quarters were revised up (Q2 revised to 8.1% from 7.6%, and Q1 to 8.2% from 7.8%)
Annual growth revised up: The National Statistics Office (NSO) now pegs fiscal 2024 GDP growth at 7.6% with its second advance estimates (SAE) compared with 7.3% previously. However, the gross value added (GVA) estimate — which measures GDP from a production approach — was unchanged at 6.9% as estimated previously. A sharp rise in net tax growth contributed to the divergence between GDP and GVA and was a key factor behind the upward revision of GDP growth. Based on SAE, growth in Q4 is estimated to slow to 5.9%
Be mindful of past revisions: Growth has been revised for the past two fiscals. While the print for fiscal 2023 was revised down 25 basis points (bps) to 7.0%, for fiscal 2022 it was up a significant 60 bps to 9.7%
Dichotomies prevail: Growth in the current fiscal year has been driven by fixed investments (10.2% growth), while private consumption at 3.0% trailed overall GDP growth. On the supply side, industry grew the most (9%) while agriculture (0.7%) and services (7.5%) lagged
