The economic situation in India continues to improve as consumer demand propels it to maintain its position as the fastest-growing major economy globally in 2024, as reported by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) on Thursday.
This robust consumer demand is anticipated to spur increased investment across various sectors in the country, including construction, hospitality, and crucial infrastructure areas like railways and aviation. The country’s GDP expanded by an impressive 7.6% in the July-September quarter, surpassing expectations, driven by government spending and a boost in manufacturing.
Despite the Reserve Bank of India (RBI) projecting a growth rate of 6.5%, India’s actual GDP growth of 7.6% outpaced the estimates. This growth even overshadowed China’s 4.9% rise during the same period, while Western economies grappled with challenges posed by high interest rates and soaring energy prices.
ASSOCHAM Secretary General Deepak Sood expressed confidence in India’s macroeconomic outlook, highlighting consistent growth. He emphasised the need for critical building blocks contributing to brighter prospects for the nation’s economy.
India Inc. was said to be leading by key sectors such as finance, construction, hospitality, aviation, and manufacturing, including electronics, which is meant for even further improvement in the upcoming year. The industry body attributed this positive trajectory to factors like low crude oil prices, which help keep inflation in check and positively impact the cost of raw materials. Construction sectors have also ended up benefiting related industries such as steel, cement, mining, electricity generation, and consumer durables.
The macroeconomic indicators, including a robust government balance sheet, impressive tax collections, record foreign exchange reserves, a stable rupee against major currencies, and signs of revival in merchandise exports, are expected further to enhance India’s economic standing on the global stage.
The Reserve Bank of India highlighted that the decline in economic challenges is primarily due to a lower merchandise trade deficit and the growth of services exports. Notably, services exports, particularly in software, business, and travel services, grew by 4.2% year-on-year.
As India continues to showcase resilience in the face of global economic uncertainties, the nation’s economic landscape appears poised for sustained growth, with favourable indicators paving the way for a promising future.