India's economy grew at 8.7% in the fourth quarter of FY23, the highest in four quarters. The growth was driven by strong growth in manufacturing, construction, and services sectors. The economy grew at 8.1% in FY23 as a whole, the highest in four years.
The growth in the fourth quarter was supported by a number of factors, including:
Strong manufacturing growth: Manufacturing growth accelerated to 13.5% in the fourth quarter, from 11.9% in the third quarter.
Construction growth: Construction growth also accelerated to 10.8% in the fourth quarter, from 8.6% in the third quarter.
Services growth: Services growth remained robust at 8.5% in the fourth quarter, from 8.4% in the third quarter.
The strong growth in the fourth quarter helped to offset the slowdown in the first three quarters of the year. The economy grew at 4.5% in the first quarter, 4.1% in the second quarter, and 3.1% in the third quarter.
The slowdown in the first three quarters was due to a number of factors, including:
The second wave of COVID-19: The second wave of COVID-19 hit India in April and May 2022, disrupting economic activity.
The Russia-Ukraine war: The Russia-Ukraine war also had a negative impact on the Indian economy, as it led to higher commodity prices.
Despite the slowdown in the first three quarters, the economy rebounded strongly in the fourth quarter. The strong growth in the fourth quarter was supported by a number of factors, including:
The easing of COVID-19 restrictions: The easing of COVID-19 restrictions led to a revival in economic activity.
The government's stimulus measures: The government's stimulus measures, such as the Pradhan Mantri Garib Kalyan Yojana, also helped to support economic growth.
The strong growth in the fourth quarter is a positive sign for the Indian economy. The economy is expected to continue to grow in FY24, albeit at a slower pace. The Reserve Bank of India (RBI) has projected the economy to grow at 7.2% in FY24.
The RBI has also said that inflation is expected to remain elevated in FY24, but it is expected to come down from the current level. The RBI has projected inflation to average 6.0% in FY24.
The government has taken a number of measures to control inflation, such as banning the export of wheat and imposing a windfall tax on oil producers. The government is also expected to announce more measures to control inflation in the coming months.
The strong growth in the fourth quarter and the expected growth in FY24 are positive signs for the Indian economy. The economy is expected to continue to grow in the coming years, albeit at a slower pace.
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