Festive season fuels India’s return to world-beating growth

India showed more signs of a recovery taking hold last month as its consumption-driving festive season kicked off, keeping it on track to regain the title of the world’s fastest-growing major economy.

An array of indicators compiled by Bloomberg News pointed to a continuing rebound in demand in September, helping keep the needle on a dial measuring so-called animal spirits steady at 5 for a third straight month. Sentiment in the dominant services and manufacturing sectors was strong, thanks to a surge in new orders. Bank loan disbursals also grew as Asia’s third-largest economy slowly emerged from the shadows of the Covid-19 pandemic.

The recovery coincides with the start of India’s months-long festive season beginning with Ganesh Chaturthi in September, heralding the boom season for consumption. The International Monetary Fund, as well as India’s central bank, this month estimated the nation’s gross domestic product will grow 9.5% in the year ending March — the quickest pace among major economies — after contracting 7.3% last year.

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