Organization of Petroleum Exporting Countries (OPEC) has stated in a monthly update that the robust growth momentum in Indian economy is expected to persist, benefiting from the strong finish to 2023, with 4Q23 growth reaching 8.4%, y-o-y. Manufacturing continues to play a crucial role in driving growth, supported by Production Linked Incentives (PLI) schemes in strategic sectors. Confidence levels remain high, as indicated by the upward trajectory of PMI indexes in both manufacturing and services. While unemployment shows a slight decline, the services sector could experience upside potential. However, the agricultural sector is anticipated to face challenges due to ongoing issues related to irregular weather patterns and relatively low water reservoir levels, leading to decreased output and sectoral performance.

OPEC stated that India’s consumer confidence rose to 98.5 in March, up from 95.1 in January. Industrial production maintained growth, with January figures showing a y-o-y growth rate of 3.8%, following 4.2%, y-o-y, in December. Government support for manufacturing is expected to sustain momentum in the sector. The general election campaign, commencing this month and spanning approximately 7 weeks, will drive spending patterns impacting demand and the service sector. While the incumbent party is anticipated to secure favourable results, competing political parties are increasing spending efforts to secure additional seats. Although pre-election handouts, particularly in rural areas, have not seen an increase this year, more efficient delivery methods and recipient verification processes are likely to enhance the effectiveness ofthese distributions.

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