7.8% slam dunk! 'Dead' economy proved to be quite alive and kicking

India's economy grew by 7.8% in the April-June quarter of FY27, surpassing economists' expectations despite facing numerous external pressures. This growth rate exceeded the Reserve Bank of India's forecast of 7% and the 7.1% median prediction from the Reuters poll. President Donald Trump had previously referred to India as a "dead economy," but recent developments have demonstrated the resilience of the Indian economy.

The global economic situation, including tensions in the Middle East, the Iran war, oil price fluctuations, and supply chain disruptions, had led many experts to predict a slowdown in India's economic growth. However, the actual 7.8% growth rate defied these predictions. The broad-based GDP performance indicated that various sectors of the economy were contributing to the growth, rather than relying solely on government spending.

Private investment surged by 11.9%, with a larger share of GDP, demonstrating that companies were investing in areas such as data centers, power projects, and industrial capacity. Manufacturing output grew by 9.2%, despite higher energy and input costs, while services expanded rapidly by around 10%. Exports also outperformed expectations, growing by 12% instead of weakening due to global uncertainties.

The strong consumer demand, driven by factors such as strong vehicle sales, credit growth, and earlier government incentives, played a significant role in sustaining economic growth. The resilience of the Indian economy in the face of external shocks highlights its ability to adapt and maintain growth in challenging circumstances.