Global banks raise forecasts for India’s economic growth to 7% after strong Q2 beat

India’s economy would grow at a 6.7%-7% annual pace in the fiscal year ending March 31, 2024, according to several economists after data showed growth outpaced in the last quarter, supported by a manufacturing boom.

Barclays and Citigroup expect India’s economy to grow at 6.7% during the fiscal year ending March 2024, up from previous projections of 6.3% and 6.2%, respectively.

Many other analysts have also raised their estimates of the growth rate of the country’s economy.

Optimism stems from Thursday’s report showing gross domestic product (GDP) rising 7.6% in the three months to September year-on-year, higher than estimates from a Bloomberg survey of economists. The growth rate is also well above the Reserve Bank of India’s projection of 6.5%.

India stands as the world’s fastest-growing major economy, with growth remaining resilient to the global slowdown and the Reserve Bank of India raising interest rates six times since last year.

The growth rate exceeded expectations in the last quarter thanks to the activity of the manufacturing and construction sectors and the intensification of government investment ahead of the elections. 

The Modi administration is spending billions of dollars to boost the country’s infrastructure and is supporting companies targeting production in India.