In a surprising twist, India has emerged as the world's fastest-growing economy, boasting an impressive 8.4% GDP growth in the third quarter, surpassing even optimistic estimates.
IMF Executive Director Krishnamurthy Subramanian expressed India's economic prowess, highlighting the nation's exceptional growth driven by robust private consumption and flourishing manufacturing and construction activities.
The recent GDP surge, the highest in six quarters, has positioned India for an overall 8% growth this year, according to Subramanian, a former chief economic advisor to the Indian government.
The Indian government echoed this sentiment, revising its GDP growth outlook for fiscal year 2023-24 to 7.6%, up from the earlier forecast of 7.3%.
Subramanian attributed India's economic ascent to a strategic shift in the government's focus towards higher capital expenditure, a trend that has gained momentum in recent years.
The Finance Ministry's interim budget in February emphasized fiscal prudence, projecting a reduction in the fiscal deficit for 2025 and a significant boost in infrastructure spending.
Anticipating continued fiscal responsibility, Subramanian expected a similar trend in the upcoming full union budget, set to be released after India's general elections.
The interim budget outlined a substantial 11.1% increase in capital expenditure to 11.11 trillion Indian rupees ($133.9 billion) for fiscal year 2025.
Subramanian lauded the responsible fiscal math, reinforcing confidence in India's economic trajectory and hinting at sustained growth.