Aided by a solid urban consumption and government spending, Indian ceremony is likely to continue its strong growth in the quarter to end of September, a report by Reuters said. According to the report, India could outpace a slowing global economy squeezed by elevated interest rates and higher energy prices.
India, Asia's third-largest economy, is expected to grow at 6.8 per cent in the July-September quarter compared with a year earlier, according to a Reuters poll. As China, the world’s second-largest economy, has slumped and some big Western countries are anticipating the possibility of recession, India's is seen as the only bright spot globally.
According to Reuters poll’s consensus forecast is higher than Reserve Bank of India's (RBI's) forecast of 6.5 for the quarter, but lower than the 7.8 growth the economy saw in the previous quarter, helped by the comparison with a low base the previous year. "Domestic demand remains the key economic driver of activity, as external demand continues to remain weak," Barclays economist Rahul Bajoria said, adding that services and construction sectors have shown robust growth.
As per Reuters report, private consumption accounts for nearly 60 of the Indian economy. During the quarter, urban consumption indicators such as passenger vehicle sales rose over 38 and domestic passenger aviation traffic growth exceeded 20 through the three months. Record online sales of e-commerce players such as Amazon and Walmart owned Flipkart during the country's festival season was another evidence of strong consumption in urban centres.
Economic Affairs Secretary Ajay Seth on Wednesday told reporters the economy showed good momentum and he expected "good numbers" for the September quarter.
The Centre spent 49 of its capital expenditure budget of Rs 10 lakh crore ($120.01 billion) between April and September, compared with over 45 of Rs 7.5 lakh crore in the same period last year. "We had expected government capex spending and the real estate sector to drive growth and, indeed, both factors have crucially underpinned a construction cycle which has been a key ingredient of growth this year," JP Morgan's Sajjid Z Chinoy said in a note.