India's Economic Surge: Q2 GDP Growth Fueled by Private Consumption and Investment

India Ratings & Research projects a 7.2% GDP growth for India's second quarter, driven by private consumption and steady investment demand. A resilient services sector and favorable base effects contributed to the robust growth, while lower inflation bolstered real wages and consumption.

India Ratings & Research (Ind-Ra) has projected a significant 7.2% growth in India's GDP for the second quarter of the current fiscal year, predominantly driven by private consumption, according to a statement released on Wednesday.

The Indian economy, which last year saw a 5.6% growth in the July-September period, is witnessing accelerated growth due to strong domestic demand and a resilient services sector. Ind-Ra's economist Paras Jasrai highlighted the surge in private consumption as a pivotal growth driver, supported by steady real income gains.

Lower inflation, coupled with favorable base effects, has underpinned the economic momentum. While nominal GDP growth demonstrates some concerns, the robust real GDP figures provide a positive outlook, with the support of investment demand fostered by government capital expenditure.

(With inputs from agencies.)