The Reserve Bank of India expects the Indian GDP to be ‘gaining momentum’ in Quarter 3 of FY24 due to festive demands. The bulletin released by RBI on Thursday says that “investment demand appears to be resilient with the government’s infrastructure spending” which will drive the growth of the Indian economy.
The festive season witnessed a huge domestic demand which would certainly give a thrust to the economy. India’s gross domestic product (GDP) increased by 7.8 per cent in the first quarter of FY24, through which the RBI expects the economy to grow by 6.5 per cent.
Recently, various global agencies have also indicated a positive outlook for India’s growth in the current fiscal year.
The Global OutlookMoody’s Investor Services, in its Global Macro Outlook 2024-25 report, has retained India’s economic growth at 6.7 per cent for 2023, citing strong domestic demand which has built a good resilience amid a global slowdown. Moody’s has also predicted that India will observe growth of 6.1 per cent in 2024 and 6.3 per cent in 2025.
According to S&P Global, India is expected to be the “fastest growing nation in 2023” and its growth remains buoyant this fiscal year.
Morgan Stanley Research, 2024 India Economics Outlook, said it expects India’s economic growth at around 6.5 per cent for FY2024 and FY2025. It said that the domestic demand supported by strength in corporate and financial sector balance sheets will aid India’s economy.
In October, the International Monetary Fund (IMF) in its World Economic Outlook (WEO), had raised its 2023-24 GDP growth forecast for India to 6.3 per cent on the back of strong consumption demand domestically. The prediction came close to RBI’s expectation of 6.5 per cent for the current fiscal.
Foreign brokerage UBS’s chief India economist Tanvee Gupta Jain said that they expect “growth momentum in the near term to get support from higher household spending during the festive season” but added that managing the macro risks and next year’s General Elections are the key factors to watch out for, as reported by Business Standard.
The World bank in its India Development Update (IDU) in October has also stated that India’s growth would remain resilient despite global challenges and forecasted India’s GDP growth for FY 23/24 to be at 6.3per cent.
The Bank said, “the expected moderation is mainly due to challenging external conditions and waning pent-up demand,” adding that “service sector activity is expected to remain strong with growth of 7.4per cent and investment growth is also projected to remain robust at per cent”.
The Indian Outlook
The Indian think tank, Federation of Indian Chambers of Commerce and Industry (FICCI), in its Economic Outlook Survey in October, has also projected the Indian economy to grow by 6.3 per cent in FY24 with a minimum and maximum growth estimate of 6.0 per cent and 6.6 per cent respectively.
On a similar note, V Anantha Nageswaran, Chief Economic Advisor (CEA) of the government, said that India was poised to achieve a gross domestic product growth of 6.5 per cent this year. Speaking at an event in Coimbatore, he said that the short-term economic growth and the medium-term growth will be steady. However, there will be challenges beyond 2030, as per a report by ToI.
Similarly, the Finance Minister Nirmala Sitharaman, Addressing the Indo-Pacific Regional Dialogue, said, “the Indian economy is set to emerge as the world’s third largest economy by 2027, hopping over Japan and Germany, as its GDP crosses the $5 trillion level”.
Thus, the world is looking forward to the growth of the Indian economy to drive the global financial system as nations face challenges with China and the supply chains moving to India. For the next couple of years and probably the next decade, India will act as an engine of the developing world.
