In its First Advance Estimates (FAE) for GDP for FY24, the NSO projects India’s GDP growth at 7.3%, higher than most estimates (6.7-7.0% range).
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The NSO projects India’s FY24 GDP growth at 7.3%, higher than most estimates (6.7-7.0% range). Growth momentum is expected to be led by government spending (on the demand side) and industrial and financial sectors (on the supply side). In contrast, there is expected to be a drag from private consumption (on the demand side) and agriculture and trade/hospitality/communication related services (on the supply side). FY24 GDP is seen to be benefiting from continued push from government spending and deflation in industrial inputs. While these point towards an upside in growth momentum, Q4 could face woes from inadequate rabi sowing and the need to rationalize government spending (for adherence to the headline budgeted fiscal deficit target), besides the lingering impact from tight domestic monetary conditions, gradual waning of global demand, and geopolitical disruptions. We now see a minor upside bias to our FY24 GDP growth forecast of 6.8%, while attaching a downside risk to NSO’s estimate of 7.3%.