India's Q2 GDP data today: Economy expected to grow by 6.8%-7% in July-Sept quarter

The Indian economy is expected to post better growth numbers in Q2 FY24 on the back of better performance of the industrial sector. Based on projections made by economists and experts, GDP growth, which will be out on November 30, is expected to be in the range of 6.8 per cent to 7.2 per cent. 

Earlier, the Reserve Bank of India (RBI) had projected a growth rate of 6.5 per cent during Q2 FY24. 

According to a Reuters survey, the third-largest economy in Asia is anticipated to expand by 6.8 per cent in the July-September quarter compared to the same period last year.

In the April-June quarter, GDP growth was 7.8 per cent. While in Q2 FY23, it was 6.3 per cent.

"The consensus forecast from the poll is slightly above the Reserve Bank of India's projection of 6.5 per cent for the quarter. However, it falls short of the 7.8 per cent growth recorded in the preceding quarter for India's economy, which was boosted by a favorable comparison with a low base from the previous year," the Reuters polls noted.

The RBI Bulletin’s State of the Economy Report for November indicated real GDP growth was poised to surpass the central bank’s projected rate of 6.5 per cent for the second quarter. This optimistic outlook finds validation in the robust and widespread bottom-line growth evident in corporate results for the second quarter, it said.

"In India, estimates of gross domestic product (GDP) for the second quarter (Q2) of 2023-24 will be released at the end of this month. There is wide consensus supported by nowcasts that real GDP growth will outperform the projections of the Reserve Bank of India (RBI) pegged at 6.5 per cent for Q2 FY24," the report said.

Notably, sectors like oil and gas, automobiles, and construction have shown substantial increases in profitability.

“In India, the momentum of the change in GDP is sequentially expected to be higher in Q3:2023-24, with festival demand remaining ebullient,” the report added.

RBI Governor Shaktikanta Das also said recently that the economy is expected to grow at a better rate.

“Looking at the momentum of economic activity and several early data points and indicators that have emerged, I can confidently say that the second quarter GDP figures, expected to be released at the end of November, in all probability will surprise everyone on the upside,” Das said at a recent event.

What economists are expecting

Economists have predicted that the GDP is expected to grow at 6.8-7.0 per cent in the second quarter of 2023-24. Some have even said that GDP numbers can go up to 7.2 per cent.

ICRA has projected the year-on-year (YoY) growth of the GDP to moderate sequentially to 7.0 per cent in Q2 FY2024 from 7.8 per cent in Q1 FY2024. The GVA growth is estimated to ease to 6.8 per cent in Q2 FY2024 from 7.8 per cent in Q1 FY2024, driven by the services sector (to +8.2 per cent from +10.3 per cent) and agriculture (to +1.0 per cent from +3.5 per cent), amid an improvement in industry (to +6.6 per cent from +5.5 per cent).

“A normalising base and an erratic monsoon are expected to result in a sequential moderation in the GDP growth to 7.0 per cent in Q2 FY2024 from 7.8 per cent in Q1 FY2024. Regardless, we anticipate that the GDP expansion in this quarter will exceed the Monetary Policy Committee’s (MPC’s) October 2023 projection of 6.5 per cent," said Aditi Nayar, Chief Economist, Head-Research & Outreach, ICRA.

She added:  “Looking ahead, uneven rainfall, narrowing differentials with year-ago commodity prices, the possible slowdown in momentum of Government capex as we approach the Parliamentary Elections, weak external demand and the cumulative impact of monetary tightening are likely to translate into lower GDP growth in H2 FY2024. As a result, we maintain our FY2024 GDP growth estimate at 6.0 per cent, lower than the MPC’s projection of 6.5 per cent for the fiscal.”

As per economists at SBI, the quarterly GDP growth for the Q2 FY24 is expected to be in the range of 6.9 per cent-7.1 per cent. This will firmly push up the FY24 growth rate over RBI projections at 6.5 per cent, it added.

Higher capital expenditure by the Centre and States are expected to have an impact on overall growth, the report further said.

 

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