Economists predict India's Q4 FY24 GDP growth to be between 6.1% and 6.7%

India's GDP in the fourth quarter of the financial year 2023-24 is expected to have grown within the range of 6.1-6.7 per cent, lower than the over 8% rate recorded in the previous three quarters, according to projections by various economists.

The GDP numbers for the fourth quarter (January-March 2024) and the provisional estimates for the 2023-24 fiscal year are scheduled to be released by the government on May 31.

Economists estimate that the expected growth for the 2023-24 fiscal year will be in the range of 7.6-7.8 per cent. The Indian economy grew 8.2 per cent in the June quarter, 8.1% in the September quarter, and 8.4 per cent in the December quarter of 2023-24.

Kotak Mahindra Bank Chief Economist Upasna Bhardwaj noted that high-frequency data suggests robust growth across the board. Trade and hotels have held up well in the fourth quarter. Manufacturing activities have also been strong, and construction-linked and investment segments should be performing better. However, the agriculture sector might be a laggard and could see contraction during the quarter. "We are expecting 6.1 per cent GDP growth for the fourth quarter, and as a result, the full-year GDP growth should be close to 7.6 per cent," Bhardwaj said.

India's GDP expanded by 6.1 per cent in the March quarter of the 2022-23 fiscal, according to estimates released on May 31, 2023. The growth for the full fiscal year 2022-23 was per cent

We anticipate a moderation in economic activity within the services segment and across the industrial side overall. This expectation is reflected in the projected Gross Value Added (GVA) numbers of 5.7 per cent for the fourth quarter, compared to the GDP growth rate of 6.1 per cent," she added.

GDP represents the total value of goods and services produced in a given period, while GVA is derived from GDP by subtracting net taxes (gross tax collection minus subsidy).

Looking ahead to the current fiscal year (2024-25), Kotak Mahindra Bank expects growth to reach 6.6 per cent, albeit with an upward bias. Bhardwaj noted that rural consumption is expected to gain momentum, although there could be a potential impact on export growth in the latter half of the fiscal year.

"Currently, exports have remained resilient, showing minimal impact from global demand disruptions. However, we anticipate some impact in the future," she said.

"Bhardwaj highlighted the anticipated acceleration in rural consumption demand, juxtaposed with potential saturation in urban demand. Consequently, there could be a positive impact on consumption in the current fiscal year," she added.

EY India Chief Policy Advisor DK Srivastava remarked that both domestic and international institutions are forecasting robust growth of around 7 per cent for India in the fiscal year 2025.

"It is expected that the GDP growth in the fourth quarter of the fiscal year 2024 may exceed 6.5per cent, leading to an annual growth rate close to 7.8 per cent as projected by the IMF," Srivastava said.

"India Ratings & Research, another rating agency, anticipates the country's GDP growth rate for the March quarter to be 6.2% for the fiscal year 2023-24.

On Tuesday, domestic rating agency ICRA forecasted that India's GDP growth would moderate to a four-quarter low of 6.7 per cent in the March quarter of the 2023-24 fiscal year. ICRA estimates the GDP growth for the full fiscal year 2023-24 to be at 7.8 per cent.

During its monetary policy review in April, the Reserve Bank projected a GDP growth rate of 7 Per cent for the fiscal year 2023-24.