India's economic recovery remained on track in Q4FY23, led by growth in services. Economists estimated GDP growth at 5.5% in January–March quarter of FY23, a modest step up from 4.4% in the previous quarter.
According to B&K Securities, India's GDP growth for the current year is likely around 7.0%. The current year’s growth is being driven by private consumption and on the economic activity side, the service sector is driving growth, it said.
As base normalises, India's GDP growth will be adversely impacted in FY24 with moderation in private consumption and the impact of a slowing global economy which will keep exports sluggish, which in turn will impact both manufacturing and growth, B&K Securities noted.
Recessionary conditions in advanced economies will also adversely impact India's growth. Analysts at B&K Securities estimate FY24 GDP growth at 6%, compared to 6.5% pegged by RBI and economic survey, and 5.9% estimated by IMF.
RBI has estimated Q4FY23 Real GDP growth to be 5.1% and full year FY23 estimates by NSO is 7.0%. SBI forecasts the quarterly GDP growth for Q4FY23 at 5.5%. At this rate, India’s GDP growth for FY23 is likely at 7.1%," said SBI in its Ecowrap report.
According to Madhavi Arora, Lead Economist, Emkay Global Financial Services, growth in Q4 is expected to be driven by momentum in trade, hotel and transportation while government spending may have also picked up. There are nascent signs of consumption recovery, however, it is still led more by urban than rural.
"Net exports were less of a drag to growth amid lower trade deficit and higher services net exports. We see 4Q GDP at 5.1% and see FY23 at 7%. However, we expect growth to slow to 5.7% in FY24," said Madhavi Arora, Lead Economist, Emkay Global Financial Services
For two years in a row, the Indian economy has grown faster than China’s. The 7% projected for India compares with an uncharacteristically low 3% for China in 2022. Similarly, last year’s 9.1% for India trumped China’s 8.1%. The economic data from China has not been positive recently, leading to some firms cutting China’s GDP growth
JP Morgan has slashed China's GDP growth forecast for the second quarter and for the whole year. Analysts expect China to face some challenges in its recovery journey as any revival will likely encounter hiccups along the way. Despite these potential obstacles, China's GDP is projected to grow at 7% in the first half of the year, followed by 5% in the second half
According to SBI Research, China’s GDP is expected to witness a rebound, growing at 5.2% in 2023 and 4.5% in 2024, compared to 3.0% in 2022. Given the level of distrust towards the mainland from the global community, there are doubt whether China could use its pricing prowess in bulk manufacturing as a hook to lure the corporates