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Motilal Oswal Report
Real gross domestic product growth came in much higher than expected at 8.4% in Q3 FY24 versus 8.1% (revised higher from 7.6%) in Q2 FY24 and 4.3% in Q3 FY23 (revised lower from 4.8%). Q1 FY24 GDP growth has also been revised higher to 8.2% from 7.8%. Consequently, GDP growth for 9M FY24 stood at 8.2%. Higher-than-expected GDP growth was partly led by a downward revision in Q3 FY23 (to 4.3% from 4.8% earlier) and a very high growth in real net indirect taxes, led by lower subsidies.
Details suggest that better growth was almost entirely driven by investments (12.2% in Q3 FY24, highest in six quarters versus 2.8% in Q3 FY23).
On the other hand, private consumption growth remained weaker at 3.5% YoY in Q3 FY24 versus 1.8%/2.4% in Q3 FY23/Q2 FY24. At the same time, government consumption contracted 3.2% in Q3 FY24 versus growth of 7.1% in Q3 FY23. Discrepancies, however, added 3.5% to real GDP growth in Q3 FY24, which reflects the limitation of authorities to distribute GDP into consumption and investments properly, rather than raising doubts over the headline GDP growth.
India's investment rate rose to 31.9% of GDP in Q3 FY24, better than 30.7% of GDP in Q3 FY23. India's net imports came in lower at 2.8% of GDP in Q3 FY24 versus 3.9% in Q3 FY23. Consequently, it is likely that domestic savings picked up to 29.1% of GDP in Q3 FY24 from 26.9% of GDP in Q3 FY23.
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