
India's GDP in the fourth quarter of the financial year 2023-24 is like to be 7.4%, while the overall FY24 GDP growth likely to touch 8%, a report by SBI Research said. It is to be noted that the Centre will release the GDP figures for the fourth quarter (January-March 2024) and the provisional estimates for the 2023-24 fiscal year on May 31.
The Reserve Bank of India (RBI) estimated Q4 FY24 Real GDP growth to be 7.3%, Q1 FY25 at 7.5% and full year FY25 is expected to grow at 7.0%. Chief Wconomic Adviser V Anantha Nageswaran had also said earlier that there is a high possibility of India’s economic growth touching 8% in FY24.
"Leading indicators show a secular growth trend across urban / rural landscape though the incremental growth in rural economy is picking up faster. The % of indicators showing acceleration remained above 80 since Jan’24, with urban indicators showing marked improvement in recent months. Passenger vehicle sales, airport passenger traffic, GST collection, credit card transactions, petroleum consumption and toll collection are all indicating improving urban economic momentum," the report said.
It added: "The rural economy, on the other hand, is picking up with % of indicators showing acceleration increasing to 75 in Mar’24 compared to 56 (60) in Feb’24 (Jan’24). Diesel consumption and two-wheeler sales are showing uptick in rural economic momentum."
India's GDP surged by 8.4% in the December quarter, marking the highest growth in six quarters. The last time the economy grew faster was in Q1 of 2022-23, recording 13.1%, later revised to 12.8%. This growth trend reflects positive economic momentum and resilience in India's financial landscape.
The report further noted, "Indian Inc. in Q4 FY24, around 2,400 listed entities, reported top line growth of 9% while EBIDTA grew by around 21%, as
compared to almost flat top line in all previous quarters in current financial year. However, PAT growth declined to around 12% from 42% in the previous two quarters on yoy basis."The report noted that ‘above normal’ monsoon augurs well for rural economy by boosting domestic supplies of pulses, oilseeds and cereals.
It added that corporate GVA grew by around 18% in Q4FY24 as compared to 20% in Q4FY23 and 26% in Q3FY24. During Q4FY24 EBIDTA
growth reduced marginally to 21% from 26% in the previous quarter. "Sectors such as Banking, Automobile, Capital Goods, Consumer Durables, Pharma etc. have reported excellent numbers during the quarter ended March’24," the report noted.
GDP Growth & Outlook 2024
The SBI Research in its report noted:
> Global growth remains resilient, with easing inflationary pressures and tight employment conditions in spite of geopolitical and extreme weather event risks.
> Global headline inflation is expected to fall from an annual average of 6.8% in 2023 to 5.9% in 2024 and further to 4.5% in 2025 (IMF estimate), with AEs returning to their inflation targets sooner than EMDEs.
> The report noted that ‘above normal’ monsoon augurs well for rural economy by boosting domestic supplies of pulses, oilseeds and cereals.
GDP Growth 2023-24
Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank, told PTI that high-frequency data points to robust growth across various sectors. She noted that the trade and hotel industries performed well in the fourth quarter.
“Manufacturing activities have been strong, and construction-related and investment segments should be doing better, but the agriculture sector might lag and even see contraction during the quarter. We are expecting a 6.1% GDP growth for the fourth quarter, which should result in an annual GDP growth close to 7.6%,” Bhardwaj stated.
DK Srivastava, Chief Policy Advisor at EY India, said that both domestic and international institutions predict robust growth of around 7% for India in the fiscal year 2025.
"It is anticipated that GDP growth in the fourth quarter of fiscal year 2024 might exceed 6.5%, resulting in annual growth close to 7.8%, as projected by the IMF," Srivastava said.
India Ratings & Research has predicted a GDP growth rate of 6.2% for the fourth quarter of the fiscal year 2023-24. Domestic credit rating agency ICRA has forecasted a deceleration in India's GDP growth to 6.7% — the slowest in four quarters—for the same period. For the entire fiscal year of 2023-24, ICRA projects an overall GDP growth rate of 7.8%.