Indian economy to grow at 6% in FY24 due to global slowdown

India’s economic growth is expected to slow down to 6 per cent in this financial year (FY24) from 7.2 per cent in FY23 due to headwinds in the global economy, the National Institute of Public Finance and Policy (NIPFP) said in a mid-year macroeconomic review on Friday. 

“The Q1 industrial growth remained buoyant, especially construction and consumer non-durables; however, the agricultural growth was muted and the services growth was sluggish,” it said.  

The retail inflation is also expected to remain below the 6 per cent limit at 5.1 per cent in this financial year, due to the lagged effect of monetary policy transmission and broad-based decline in food, energy, and core inflation.

On Thursday, the Reserve Bank of India (RBI) kept the real GDP forecast for FY24 unchanged at 6.5 per cent on the back of higher rural and urban growth, increased investment activity, and government’s plan of higher capital expenditure.

However, the central bank revised the inflation figure to remain at 5.4 per cent in FY24, with inflation for Q2, Q3 and Q4 to remain at 6.2 per cent, 5.7 per cent and 5.2 per cent, respectively.