India's 7.6% GDP growth in Q2 beats expectations

India's gross domestic product grew 7.6% year-on-year in the July-September quarter, higher than the Reserve Bank of India (RBI) monetary policy committee's forecast of 6.5%, according to data released by the government on Thursday.

"Real GDP or GDP at Constant (2011-12) Prices in Q2 2023-24 is estimated to attain a level of ₹41.74 lakh crore, as against ₹38.78 lakh crore in Q2 2022-23, showing a growth of 7.6 percent as compared to 6.2 percent in Q2 2022-23," the National Statistical Office (NSO) says in a statement.

Q2 GDP, however, is lower than the 7.8% growth seen in the April–June quarter.

Manufacturing expanded 13.9% in Q2 compared with 4.7% in the previous quarter while construction grew 13.3% in Q2 as against 7.9% in Q1.

Reacting to the better-than-expected GDP growth numbers, Prime Minister Narendra Modi, in a post on X, says, "The GDP growth numbers for Q2 display the resilience and strength of the Indian economy in the midst of such testing times globally."

"We are committed to ensuring fast paced growth to create more opportunities, rapid eradication of poverty and improving ‘Ease Of Living’ for our people," Modi says.

Several global agencies have hiked India's GDP growth forecast for the financial year 2023-24.

S&P Global Ratings on Monday raised India’s gross domestic product (GDP) growth forecast to 6.4% from 6% earlier as robust domestic demand offsets headwinds from inflation and weak exports. "We have revised up our projection for India's GDP growth for fiscal 2024 (ending in March 2024) to 6.4%, from 6%, as robust domestic momentum seems to have offset headwinds from high food inflation and weak exports," the ratings agency said. S&P Global Ratings, however, expects growth to slow in the second half of the fiscal year amid subdued global growth, a higher base, and the lagged impact of rate hikes. "As a result, we have lowered our outlook for growth in fiscal 2025 to 6.4%, from 6.9%," it said.

Fitch Ratings also raised India's medium-term potential growth estimate by 70 basis points to 6.2% for FY24, up from its earlier forecast of 5.5%.

In October, the International Monetary Fund (IMF) raised India's growth forecast for the financial year 2023-24 by 20 basis points from its July forecast forecast to 6.3% on consumption boost.

Deloitte had also raised India’s GDP growth forecast in the range of 6.5% to 6.8% primarily due to festive spending in the coming months followed by higher government spending before the upcoming general elections mid-next year. The audit and consulting firm revised its growth forecast for India from July 2023 when it said India is likely to grow between 6% and 6.3% in FY24.