According to numbers projected on Thursday, India's gross domestic product (GDP) grew at its quickest rate in a year during the April-June quarter, while experts foresee a decline in the coming quarters.
India's GDP increased 7.7% in the April-June quarter, up from 6.1% in the prior quarter and the highest growth since April-June 2022, according to the consensus forecast in a Reuters survey of experts.
According to experts, falling commodity prices helped manufacturers boost profits and mitigate the effects of the cumulative 250 basis point increase in interest rates since May 2022.
Suvodeep Rakshit, an economist at Kotak Institutional Equities, predicted that services would be the main driver of growth on the production side and investments would be the main driver on the spending side.
The third-largest economy in Asia, India, has managed to buck the global downturn that has left several other countries, including China, in trouble. India's services sector, which contributes more than half of its GDP, has had strong growth.
For over two years, the S&P Global India services Purchasing Managers' Index has consistently held above the 50-point threshold distinguishing expansion from contraction, the longest run since August 2011.
The Indian government has been putting more money on infrastructure each year to support growth. India spent close to 28% of its 10 trillion Indian rupee ($120.91 billion) capital spending budget in the first three months of the fiscal year, which began on April 1.
A 3% fall in wholesale prices, according to Kaushik Das, chief economist for India at Deutsche Bank, would also support the robust headline growth by lowering the "GDP deflator," which is used to estimate real economic growth by excluding price increases.