India has recorded strong economic growth in the final months of 2023 — consolidating its position as the fastest-growing economy.
This achievement has given Prime Minister Narendra Modi a significant boost just a few months before the Lok Sabha elections, which are set to determine his fate for a third term.
The country recorded a growth of 8.4% in Gross Domestic Product (GDP) in the final three months of 2023 compared to 2022. This latest increase was stronger than anticipated and was made possible by the country’s manufacturing sector expanding by 11.6% during the said period.
Private consumption, which contributes to two-thirds of the GDP, also rose by 3.5%.
India’s pace of growth was the strongest among major economies in the past year. With this level of performance and growth, India is poised to overtake Japan and Germany, becoming the world’s third-largest economy in the next few years.
Real estate consultancy Knight Frank predicts that the number of ultra-rich Indians (those who have a net worth of over 30 million dollars) will rise by 50% in the next five years, marking the fastest growth globally.
The International Monetary Fund (IMF) anticipates a 6.7% expansion in India’s economy for the fiscal year through March, in contrast to the Modi government’s projection of 7.6%.
The IMF’s growth forecast for India places it ahead of China, which has a predicted growth rate of 4.6% for this year.
Banking on the positive GDP result, Indian stock markets reached all-time highs this Friday. For the better part of last year, Indian investors have sought to drive shares higher, pushing the combined values of companies listed on India’s exchange above $4 trillion late last year.
Prime Minister Modi took to X (formerly Twitter) on Thursday to express his views on India’s performance: “Robust 8.4% GDP growth… shows the strength of the Indian economy and its potential. Our efforts will continue to bring fast economic growth, which shall help 140 crore Indians lead a better life.”
However, economists have cautioned against getting too carried away with these figures, as there are underlying problems that need to be addressed.
The biggest issue remains in the agriculture sector, which contributes 15% to the economy and is still suffering due to weak monsoon rains, severely underperforming.
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