India's economy is in a "sweet spot," but growth in private consumption is expected to slow further, Radhika Rao, senior economist at DBS Bank said.
India's GDP expanded by 7.6% during the July to September quarter as a result of stronger manufacturing activity and government spending, beating Reuters poll estimates of 6.8%.
Even though it was lower than the 7.8% expansion during the April to June quarter, the country's growth is "one of the strongest in the region among major economies" and DBS expects the GDP to expand around 6.8% this year, Rao said on CNBC's "Squawk Box Asia" on Friday.
She highlighted that the slowdown in consumption activity during the July to September quarter, which will likely continue through the winter, was owed to weak farm production in the summer months due to erratic weather.
Although household consumption is likely to have picked up during the October to December quarter due to festivals including Diwali, it could fall again in the January to March quarter ahead of the 2024 general elections, Rao warned.
Persons:
Radhika Rao, Rao
Organizations:
DBS Bank, DBS