NEW DELHI: India’s economy will sustain growth momentum quarter on quarter after it beat expectations in July-September, and inflation is on the decline despite temporary food shocks, the government said on Friday in its monthly economic report.

India’s economy grew faster than expected in July-September raising expectations that Asia’s third-largest economy will outperform its own estimates for the full year.

Indian economy to exceed growth estimates after strong Q2 beat

“Risks to growth and stability outlook mainly emanate from outside the country. Nonetheless, the Indian economy is expected to comfortably achieve a growth rate upwards of 6.5 per cent in FY24,” the government said in its report.

“The momentum gained in Q2 of FY24 is likely to be sustained in Q3 as well,” it said.

Retail inflation in November rose at its quickest pace in three months due to higher food prices, but core inflation - which strips out volatile food and energy prices - was the lowest in nearly four years at 4.1%.

Growth in consumption demand is expected to be sustained while rural demand is catching up, the government also said.