Economists expect the India’s real GDP to grow by 6% in 2023-24 amidst easing of pent up demand, tighter monetary conditions as well as weak global conditions.
According to official data released on Tuesday, GDP growth is estimated at 7% for 2022-23 with a nominal growth of 15.9% as against 15.4% in the first advance estimates. The GDP growth for 2021-22 has been revised upwards to 9.1% from 8.7% estimated earlier.
Rumki Majumdar, economist, Deloitte India said. “We remain cautiously optimistic even as there are significant risks to growth. Private consumption spending was the biggest contributor. However, sustained growth in consumer spending is a concern which has led to hesitation amongst business to increase private investments,” he said.
Also read: G20 Summit 2023: Key takeaways from Finance Ministers, Central Bank Governors big meeting last week
Bank of Baroda
However, Rahul Bajoria, MD & Head of EM Asia (ex-China) Economics, Barclays said it has retained its GDP forecast at 7% for FY23 and expects it to moderate to 6% in FY24. “For FY23-24, we continue to expect a soft landing for the economy as tighter monetary conditions and still-elevated inflation take a toll,” he said in a note.
Dipti Deshpande, Principal Economist, CRISIL said the agency has forecast GDP growth at 6% for next fiscal primarily on account of the impact of slower global growth and higher interest rates biting into growth for some interest rate sensitive sectors. “A sharper-than-expected global growth slowdown and forecasts of an El Nino that can disturb Indian monsoons are the other risks to watch out for,” she said.
Rajani Sinha, chief economist, CareEdge said the agency expects GDP growth to moderate to 6.1% in FY24. “There is expected to be some fizzling out of the pent up demand seen in the last few quarters. Government focus on capex and improving intent of private sector to invest should be supportive of investment demand,” she said, while noting that improving rural demand and rising rural wages are the positive developments for aggregate demand.
Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research said that going ahead into the next fiscal, the factors that will play an important role are the impact of higher interest rates on urban demand, the stability of the monsoon, and the absence of the base factor. The agency has kept its GDP growth forecast for FY24 at 6% for now without factoring in any additional risks from monsoon and external factors and at about 7% for FY23.
Also read: Skymet predicts ‘searing’ summer; forecast raises concerns over FY24 agri growth
Manufacturing is seen to remain a weak spot even going ahead. DK Srivastava, chief policy adviser, EY India noted that the GDP growth projection for FY 24 remains in the range of 6% to 6.4%. “Going forward, manufacturing sector performance depends on how demand picks up in both government and private consumption. There are signs of continuing weakness in consumption demand, which will impact the sector and will also impact services sectors like trade, hotels, transport, communication and services,” he said.
The second advance estimates of national income for 2022-23 has revised downwards the growth projection for manufacturing to 0.6% from the first advance estimate of 1.6%.