In the December 2023 quarter, gross fixed capital formation (GFCF) emerged as the fastest-growing segment of GDP, marking a significant uptick in investment demand within the economy. Recording a robust 10.6% growth, GFCF notched double-digit expansion for the second straight quarter, surpassing the previous eight quarters’ average growth of 7.4%. This surge in investments played a pivotal role in driving GDP growth during the quarter, as evidenced by the jump in the economy’s investment rate. The investment rate, or the proportion of GFCF in GDP, leaped to 32.4% in the December quarter, up from 31.8% in the same quarter the previous year. Looking ahead, the share of GFCF in nominal GDP is anticipated to climb to 31.3% in FY24, up from 30.7% in FY23, buoyed by increased government capital expenditure. But what is glaring is the absence of private sector spending.

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