The Q1 GDP numbers are expected to be announced and the economy is expected to come out with shining performance in the first quarter. According to the most recent RBI statement, it expects Q1 GDP to come in at 8 per cent.
However, going forward, RBI’s projection for Q2 indicates growth to taper off to 6.5 per cent and maintain the 6 per cent level even in Q3. Q4, as per the RBI projection is likely to take the maximum hit with the Central Bank estimating a 5.7 per cent reading with risks broadly balanced. Real GDP growth for Q1:2024-25 is projected at 6.6 per cent by RBI.
Looking ahead, the RBI statement after the last Policy Meeting in August, emphasised that the recovery in kharif sowing and rural incomes, the buoyancy in services and consumer optimism should support household consumption. Healthy balance sheets of banks and corporates, supply chain normalisation, business optimism and robust government capital expenditure are favourable for a renewal of the capex cycle which is showing signs of getting broad-based.
That said, RBI highlights that the headwinds from weak global demand, volatility in global financial markets, geopolitical tensions and geoeconomic fragmentation, pose risks to the outlook. While most economic projections show a Q1 GDP reading closer to RBI estimates, the question remains about maintaining the growth pace for the rest of the quarters in FY24.