Listen to this article
The data released by the Ministry of Finance reveals that India has registered GDP growth of 7.8% in April-June 2023, highest among major economies.
The data shows that while China has recorded GDP growth of 6.3%, Indonesia witnessed GDP growth of 5.2%.
An increase in capital expenditure both at central and state levels, along with stronger consumption demand, especially in rural areas is one of the key factors for India’s GDP growth. Further, steady industrial growth, strong services growth and well-capitalized banking sector are the key factors for India’s growing GDP, said the ministry.
In a press release, Dr. V. Anantha Nageswaran, Chief Economic Adviser (CEA), Ministry of Finance, said that overall India’s macroeconomic stability and growth prospects are its strong points and the first quarter GDP data has reaffirmed these two key aspects of the government’s overall macro-economic management, particularly during the COVID pandemic years.
The biggest positive for Indian economy is that the private sector capital formation is well underway. This augurs well for future employment and income growth of Indian households, the CEA said. He further highlighted that the new Investment projects announced by the private sector have been highest in Q1 of FY2023-24 in 14 years.
Abhishek Bisen, Head - Fixed Income at Kotak MF said, “India’s April-June GDP growth at 7.8% in line with expectation was higher than 6.1% growth in January-March 2023. On the supply side, the services sector (esp BFSI & Real Estate) continues to be the dominant factor driving growth with 10.3% YoY increase. On the demand side, while net exports were a drag to GDP, private consumption improved significantly supporting high-frequency data on auto sales, air traffic, fuel consumption etc. and fixed investment growth was relatively steady supported by centre and state capex. Going ahead risk to growth may increase from uneven and deficient monsoon rainfall and the external headwinds.”
