Surprise boost: Economy grows 7.6% in Q2, beating estimates
Economists had, in an ET poll, estimated a median 6.7% rise in gross domestic product (GDP) in the quarter.
The second-quarter GDP growth is just shy of 7.8% clocked in the June quarter and significantly higher than the 6.2% recorded in the September quarter last year. Growth in the first half of FY24 was 7.7% compared with 9.5% a year earlier.
«Manufacturing sustained expansion, endorsed by IIP (Index of Industrial Production) and core infra sector growth,» said chief economic advisor V Anantha Nageswaran.
The higher-than-expected growth triggered a raft of upgrades in full FY24 growth estimates.
«The latest numbers indicate that the economic recovery is on track despite the adverse geopolitical situation,» said Sunil Kumar Sinha, principal economist, India Ratings.
Manufacturing, which has a nearly 19% weight in the economy, posted a nine-quarter high 13.9% growth, as company profits improved on the back of strong demand and drop in input costs. The mining and construction sectors also posted strong growth, expanding 10% and 13.3%, respectively.
Services growth was muted with financial services rising 6%, less than half the 12.2% growth in June quarter. Utilities grew 10.1% while trade, hotels, transport and communications grew 4.3%.
The demand-side data showed gross fixed capital formation, a measure of investment, rose 11% from a year earlier compared with 8% in the first quarter, lifting it to 35.3% of GDP.
Private consumption
The investment rate at 30%, measured in nominal terms, was the highest for the second quarter since FY15.
«Investment is showing strong growth trend,» said Rajani Sinha, chief economist, CareEdge.
