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India's Gross Domestic Product (GDP) growth figures for the fourth quarter of the financial year 2024 (Q4FY24) will be released on Friday. Several key financial institutions have provided their growth predictions ahead of the announcement, highlighting a positive outlook for India's economic growth.
The Indian economy grew by 8.4 per cent year-on-year (Y-o-Y) in Q4 FY23, marking the strongest quarterly growth since Q2 FY22. This growth rate exceeded an upwardly revised 8.1 per cent in Q3, beating forecasts of 6.6 per cent, according to data from the Ministry of Statistics and Programme Implementation (MoSPI).
Here are the expectations for India's GDP growth for the quarter that ended on March 31, 2024:
Reserve Bank of India's GDP predictions
The Reserve Bank of India (RBI) projected that the Indian economy will grow at 7 per cent in the current financial year, maintaining its position as the fastest-growing major economy globally. This growth is supported by the sustained strengthening of macroeconomic fundamentals.
In its monetary policy meeting in April, the RBI forecasted 7 per cent growth in real GDP for Q4FY24.
In its monetary policy meeting in April, the RBI forecasted 7 per cent growth in real GDP for Q4FY24.
In its latest annual report, the RBI noted that while it expects headline inflation to moderate further, food inflation remains vulnerable to supply-side shocks. The Indian economy expanded robustly in FY24, with real GDP growth accelerating to 7.6 per cent from 7.0 per cent in the previous year, marking the third consecutive year of 7 per cent or above growth.
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Economist Intelligence Unit's GDP predictions
The Economist Intelligence Unit's (EIU) Global Outlook report forecasts India to be the fastest-growing major economy from 2024 to 2028, predicting its growth will outpace China's. As India's economic influence expands, the report projects that by the mid-2040s, BRICS nations will surpass the G7 in terms of nominal gross domestic product (GDP).
The EIU has revised its forecast for India's real GDP growth for 2024 to 2.5 per cent, up from 2.4 per cent previously. "Growth will be unchanged rather than slowing from 2023. Growth is proving surprisingly resilient in the face of high interest rates and geopolitical risks," the EIU Global Outlook report stated.
Review of India's GDP for all quarters in FY24
India's economic growth in Q3 FY24
India's GDP growth rate for the quarter ending December 31, 2023 (Q3FY24), surged to 8.4 per cent. This figure significantly exceeded the RBI estimate of 6.5 per cent, as reported by the National Statistical Office (NSO) of MoSPI.
The Indian economy demonstrated resilience with a 7.6 per cent growth rate in FY24, building on the 7 per cent growth rate in FY23. This performance was bolstered by a double-digit growth rate in the construction sector (10.7 per cent) and a strong growth rate in the manufacturing sector (8.5 per cent).
India's economic growth in Q2 FY24
India's GDP recorded a 7.6 per cent growth rate in the July-September quarter (Q2FY24). This marked an increase from the 6.2 per cent growth rate in the same quarter the previous year and also surpassed the projections made by the RBI's Monetary Policy Committee (MPC). The manufacturing and construction industries primarily drove the boost in Q2 GDP figures.
The manufacturing sector saw its highest growth at 13.9 per cent in Q2, rebounding from a 3.8 per cent decline in the same quarter last year and up from 4.7 per cent in Q1FY24. The construction industry followed with a growth rate of 13.3 per cent, compared to 5.7 per cent in Q2FY23 and 7.9 per cent in Q1FY24.
The electricity, gas, water supply, and other utility services industry registered the third-highest growth at 10.1 per cent, up from 6 per cent in Q2FY23 and 2.9 per cent in Q1FY24.
India's economic growth in Q1 FY24
In the first quarter of FY24, India's GDP grew by 7.8 per cent. Despite a slight moderation in investment growth during this period, the economy benefited from the front-loading of capital expenditure (capex) by the Centre and a pick-up in demand following two dismal consecutive quarters.
International Monetary Fund's India GDP predictions for FY25
The International Monetary Fund (IMF) raised its growth projection for India's GDP for FY25 to 6.8 per cent, with a forecast of 6.5 per cent expansion for the following year. This latest FY25 forecast represents a 0.3 percentage point upward revision from January's projection, according to the IMF's World Economic Outlook for April 2024.
S&P Global has also increased India's GDP growth forecast for FY25 by 40 basis points to 6.8 per cent, slightly below the central bank and government's projection of 7 per cent.
