India Ratings and Research (Ind-RA) predicts that India’s GDP growth rate for the fourth quarter of the 2023-24 fiscal year will be 6.2%. For the entire FY24, the GDP growth is expected to be around 6.9-7%. This forecast was shared by Sunil Kumar Sinha, the principal economist at Ind-RA.
Upcoming GDP Data Release
The official GDP figures for the fourth quarter (January-March 2024) and the provisional estimates for the full 2023-24 fiscal year will be released by the government on May 31. Previously, the Indian economy grew by 8.2% in the first quarter, 8.1% in the second quarter, and 8.4% in the third quarter of 2023-24.
Analysis of Growth Trends
Sinha noted that the growth rates in the first two quarters were influenced by a low base effect. The 8.4% growth in the third quarter (October-December 2023) was particularly surprising. He explained that a significant portion of the third quarter’s GDP growth came from higher tax collections, a phenomenon not expected to recur in the fourth quarter.
In the third quarter, the Gross Value Added (GVA) was 6.5%, while GDP growth was 8.4%. This discrepancy was primarily due to higher tax revenues. In contrast, both GVA and GDP growth were 8.2% in the first quarter, and 7.7% (GVA) and 8.1% (GDP) in the second quarter. GDP measures the total value of goods and services produced, while GVA is GDP minus net taxes (gross tax collection minus subsidies).
Economic Outlook
The Reserve Bank of India (RBI) has projected a GDP growth rate of 7% for the 2023-24 fiscal year in its April monetary policy review. Sinha mentioned that the GDP growth for the current fiscal year is expected to be 7.1%. He noted that the growth momentum observed in the first two quarters is likely to continue into the following quarters and into FY25.
Sectoral Insights
Sinha highlighted that the services sector, particularly construction and electricity, will continue to drive growth. However, mining and industrial output are expected to lag. The Indian Meteorological Department has predicted an above-normal monsoon, which, if accurate, could boost rural demand and support broader consumption.
Govt and International Assessments
Finance ministry monthly economic review praised the country’s resilient growth, robust economic activity, price stability, and steady external sector performance. Despite global uncertainties, India remains the fastest-growing major economy, with positive growth forecasts from international organizations and the RBI.
India’s economic resilience and strong growth prospects continue to draw positive assessments, positioning it as a leading growth engine amid global economic challenges.
