India's Economy Surges with Unexpected Growth

India's economy experienced a surprising growth of 7.8% year-on-year in the January-March quarter, bolstered by government spending and strong consumer demand. This marks a decrease from the previous quarter's 8.6% but surpasses predictions of 6.7%. The revised annual growth rate of 8.2% is the highest among major economies.

(Adds comparisons in paragraphs 4-6) NEW DELHI, May 31 (Reuters) -

India's economy grew at a faster-than-expected pace of 7.8% year-on-year in the January-March quarter, helped by government spending and resilient consumer demand, and economists expect the momentum to remain strong this year. The gross domestic product growth in the first three months of 2024, the fourth quarter of 2023/24 fiscal year, was lower than a revised 8.6% expansion in the previous quarter, government data released on Friday showed.

However, it was higher than the 6.7% growth forecast by economists in a Reuters poll. In the October-December quarter, the headline growth figure was boosted by a sharp fall in subsidies, while gross value added (GVA), seen by economists as a more stable measure of growth, rose 6.5%.

In the March quarter, GVA rose by 6.3%. India's economic growth for the full fiscal year 2023/24 was revised up to 8.2%, the highest among large economies globally, from an earlier government estimate of 7.6%.

The growth estimates will be a boost for Indian Prime Minister Narendra Modi, who is largely expected to win a third term in the national election, with results scheduled to be released on June 4.