India has forecast 7.3% annual growth in the fiscal year ending in March, the highest of any major global economy.

“These are early projections for 2023/24,” said a National Statistical Office (NSO) statement, going on to add that further revisions may be impacted by actual tax receipts, spending on state subsidies and improved data coverage.

The initial estimates of annual GDP follow the Reserve Bank of India’s (RBI) increased forecast in December to 7%, a rise from a previous 6.5% estimate.

According to analysts, growth surpassing 7% for the third consecutive year within a global slowdown may help Prime Minister Narendra Modi to secure a third term in office, Reuters reports.

“This growth comes at a time when global conditions remain weak, and its credit goes to how the government is managing the economy,” said Barclays Investment Bank economist Rahul Bajoria.

Furthermore, India is set to remain the fastest-growing major economy for the next three years, according to S&P Global Ratings, on course to overtake Japan and Germany by 2030 as the world’s third-largest economy.

The Indian economy grew 7.2% in 2022/23 and 8.7% in 2021/22.

On 1 February, the country’s finance minister, Nirmala Sitharaman, will present an interim annual budget and is forecast to hike infrastructure spending, bolstered by rising tax receipts. The budget will also target reducing the fiscal deficit from 5.9% of GDP in the current fiscal year, the Reuters report goes on to say.

In addition, government spending is forecast to rise by around 4% year-on-year in 2023/24, compared to a 0.1% rise in the previous fiscal year. Meanwhile, private investment is set to increase by 10.3%, falling short of the 11.4% rise in the previous year, according to the data.

Moreover, private consumption, which makes up almost 58% of GDP, is forecast to grow by 4.4% year-on-year, compared to the previous fiscal year’s 7.5% growth.