India Outpaces China and US in Economic Growth

India’s economy is surging, outpacing even the United States and China.

The country’s 7.8% year-on-year growth in Q1 2024 is a significant boost to the fiscal record of the current Prime Minister, Narendra Modi, who is seeking a hat trick with a third term just days away from the election results on June 4.

As a result of this development, investors are now keeping an even closer eye on the outcome of the elections.

Garima Kapoor from Elara Securities notes that consumer demand will benefit from the growth figures. Kapoor suggests that this will help buoy the incoming moonsoon season, suggesting that the nation’s economy will likely remain stable.

S&P Global on Wednesday also raised India’s sovereign rating, putting it to “positive” as the company expects to see broader economic reforms and changes to fiscal policies regardless of whether Modi succeeds in getting reelected for a third term.

Nevertheless, some economists aren’t happy with the growth. Some claim that India should grow faster and sooner, with some experts putting the number at 9% to 10% every year for the next decade or so.

Speaking of consumer demand, spending and rural growth aren’t growing as expected. Despite the nation’s robust economy, farm output only grew by 0.6% last quarter.

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