Key facts
- India's economy grew 7.8% year-on-year in the April-June quarter.
- This represents a five-quarter high for economic growth.
- The growth rate surpassed economists' forecasts of 7.1%.
- Manufacturing sector expanded by 7.7% and services by 9.3%.
- Farm sector growth was 3.7%, and private consumption rose 7%.
India's economy demonstrated robust growth, expanding by 7.8% in the April-June quarter, surpassing economists' expectations and reaching a five-quarter high. This surge was propelled by stronger-than-anticipated performance in the manufacturing and services sectors, alongside a healthy expansion in the farm sector.
The National Statistics Office (NSO) data revealed that gross value added, a key measure of economic activity, increased by 7.6% during the same period. Private consumption expenditure also saw a significant rise of 7%, indicating strengthening domestic demand. The government's capital expenditure sustained its momentum, and final consumption expenditure registered a notable 9.7% growth.
Manufacturing output grew by 7.7%, while the services sector recorded a strong 9.3% expansion. The agricultural sector contributed with a 3.7% growth. These figures are particularly significant as they come amid ongoing tariff tensions with the United States and serve as a refutation of comments made by Donald Trump, who had described India's economy as 'dead'.
The finance ministry expressed optimism, noting that high-frequency indicators for July suggest a continuation of this economic momentum. They anticipate further strengthening of domestic demand with the onset of the festive season and upcoming Goods and Services Tax rate changes, though they cautioned about near-term risks to exports and capital formation due to tariff uncertainties.