Indian Economy Surges: Q4 FY24 Records 7.4% Growth, Full-Year Estimate at 8%

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Indian Economy Surges: Q4 FY24 Records 7.4% Growth, Full-Year Estimate at 8%
Indian Economy Surges: Q4 FY24 Records 7.4% Growth, Full-Year Estimate at 8% (Image by Tumisu from Pixabay)

New Delhi, May 28, 2024 – The Indian economy has delivered a remarkable performance in the fourth quarter of FY24, defying expectations and posting a robust growth rate of 7.4%.

This surge has propelled the full-year estimate to an impressive 8%, according to a recent report by State Bank of India (SBI) Research. The positive momentum observed throughout the year highlights the resilience of the Indian economy amidst global uncertainties.

Key Highlights

Fourth Quarter Growth

  • Q4 Growth Rate: The SBI Artificial Neural Network (ANN) model, which analyzes 30 high-frequency indicators, points to a quarterly GDP growth of 7.4% for Q4 FY24. This growth significantly exceeds most estimates, showcasing the underlying strength of the economy​.

Strong Performance in First Three Quarters

  • First Three Quarters: The Indian economy maintained an average growth rate of 8.2% in the first three quarters of FY24, setting a robust foundation for the full-year performance​.

Rural Economy Acceleration

  • Rural Indicators: SBI’s research highlights an acceleration in the rural economy. Key indicators such as diesel consumption and two-wheeler sales show an uptick in rural economic activity, indicating a broader economic recovery beyond urban centers​.

Monsoon Boost

  • Weather Predictions: The prediction of an “above normal” monsoon augurs well for the rural economy. Increased domestic supplies of pulses, oilseeds, and cereals are expected due to favorable weather conditions, which should bolster agricultural output and rural income.

Global Context

  • Global Forecasts: The International Monetary Fund (IMF) has raised its global growth forecast for 2024 to 3.2%, indicating an improvement from earlier projections. Additionally, global headline inflation is expected to decline, creating a conducive environment for economic growth.

Detailed Economic Analysis

Manufacturing and Construction

  • Sectoral Growth: The manufacturing sector has been a major contributor, with growth rates as high as 13.9% during the second quarter. Similarly, the construction sector has seen a consistent double-digit growth rate, reflecting significant infrastructure investments and government support​.


  • Agricultural Output: Despite some seasonal challenges, the agricultural sector has shown moderate growth. The anticipated good monsoon is expected to further boost this sector, ensuring food security and stable prices.

Services Sector

  • Mixed Performance: The services sector has shown mixed results, with some sub-sectors like trade and transport experiencing slower growth. However, overall services still remain a vital part of the economy's growth narrative​​.

Economic Drivers and Policy Implications

Private Final Consumption Expenditure (PFCE)

  • Consumption Patterns: PFCE has shown resilience despite inflationary pressures, indicating robust domestic demand. This trend is crucial for sustaining long-term growth as it reflects consumer confidence and spending capacity​.

Government Expenditure

  • Fiscal Policy: Continued government spending on infrastructure and social programs has played a significant role in supporting economic activities and driving growth. This proactive fiscal policy has mitigated some adverse effects of global economic uncertainties​.


  • Export Growth: Despite global trade challenges, Indian exports have contributed positively to GDP growth. Sectors such as pharmaceuticals, IT services, and textiles have performed well on the global stage, showcasing India's competitive advantages.

Future Projections

FY25 Growth Projections

  • Optimistic Outlook: Experts remain optimistic about India's economic prospects for the next fiscal year. Projections indicate potential growth rates ranging from 7.5% to 8%, driven by continued investment in infrastructure, favorable monsoon conditions, and supportive government policies​​.

Potential Challenges

  • Inflation: Managing inflation remains critical to ensure sustained consumer spending and investment.
  • Monsoon Dependence: Agricultural output's heavy reliance on monsoon performance poses a risk if weather patterns deviate from expectations.
  • Global Trade Dynamics: Fluctuations in global markets could impact export-driven growth, necessitating diversification and resilience strategies.

Strategic Implications

Policy Recommendations

  • Inflation Control: Ensuring stable prices through monetary and fiscal measures is essential to maintain consumer confidence and spending power.
  • Infrastructure Investment: Continued focus on infrastructure development can create jobs, stimulate economic activity, and attract foreign investment.
  • Diversification of Exports: Expanding export bases and reducing dependency on a few sectors can mitigate risks associated with global trade fluctuations.

Long-Term Vision

  • Sustainable Growth: Emphasizing sustainable and inclusive growth, policies should aim at balancing economic development with environmental conservation.
  • Innovation and Technology: Investing in innovation and technology can drive productivity and create new growth avenues, positioning India as a global leader in various sectors.

Key Highlights

Key AspectDetailsSource
Q4 FY24 Growth Rate7.4%SBI Research, May 2024
Full-Year FY24 Growth Rate8%SBI Research, May 2024
First Three Quarters Average Growth8.2%SBI Research, May 2024
Manufacturing Growth (Q2 FY24)13.9%SBI Research, Fortune India
Construction Growth (Q2 FY24)13.3%SBI Research, Fortune India
Rural Economy IndicatorsIncrease in diesel consumption and two-wheeler salesSBI Research, May 2024
Monsoon ForecastAbove normal, expected to boost agricultural outputSBI Research, May 2024
Global Growth Forecast (2024)3.2% (IMF)IMF
Inflation ForecastGlobal headline inflation expected to declineIMF
FY25 Growth Projection7.5% to 8%SBI Research, May 2024
Private Final Consumption Expenditure (PFCE)Resilient despite inflation, indicating robust domestic demandSBI Research, May 2024
Government ExpenditureContinued support for infrastructure and social programsSBI Research, May 2024
Export PerformancePositive contribution to GDP despite global trade challengesSBI Research, May 2024
Services Sector PerformanceMixed results with some sub-sectors like trade and transport experiencing slower growthSBI Research, May 2024
Agricultural SectorModerate growth with positive outlook due to expected good monsoonSBI Research, May 2024

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