India’s GDP grew 7.6% in July-September quarter; FY-24 growth to be 6.5%, says finance ministry

iNDICA NEWS BUREAU–

The Indian economy grew 7.6 per cent during the July-September quarter of the current financial year 2023-24, remaining the fastest-growing major economy. India’s GDP growth for the April-June quarter was 7.8 per cent. Real GDP or GDP at Constant (2011-12) Prices in Q2 2023-24 is estimated to attain a level of ₹41.74 lakh crore, as against ₹38.78 lakh crore in Q2 2022-23, showing a growth of 7.6 percent as compared to 6.2 percent in Q2 2022-23, data from the Ministry of Statistics and Programme Implementation showed on Thursday.

The Reserve Bank of India (RBI), the country’s central bank, maintained real GDP growth for 2023-24 at 6.5 per cent with Q2 at 6.5 per cent; Q3 at 6.0 per cent; and Q4 at 5.7 per cent.

The only thing about which the central bank showed utmost concern at its last monetary policy meeting was inflation and its attached potential risk to the growth outlook.

Recently, industry body FICCI in a survey found that the Indian economy is projected to grow by 6.3 per cent in 2023-24 with a minimum and maximum growth estimate of 6 per cent and 6.6 per cent respectively.

FICCI’s Economic Outlook Survey was conducted in the month of September 2023 and drew responses from leading economists representing industry, banking and financial services sectors.

The International Monetary Fund (IMF) had in October raised India’s GDP growth forecast for India for the financial year 2023-24 to 6.3 per cent, its second upward revision since the April report.

IMF attributed stronger-than-expected consumption during April-June for the upward projection in the growth estimate.

The IMF growth forecast was raised from 5.9 per cent in April, 6.1 per cent in July, to 6.3 per cent now, taking it closer to the 6.5 per cent predicted by the Indian authorities.

For 2024-25, IMF pegged India’s GDP growth at 6.3 per cent, though unchanged from its earlier two projections. Meanwhile, the combined Index of Eight Core Industries (ICI) increased by 12.1 per cent (provisional) in October 2023 as compared to the Index of October 2022.

The production of all eight core industries (Cement, Coal, Crude Oil, Electricity, Fertilizers, Natural Gas, Refinery Products and Steel) recorded positive growth in October 2023 over the corresponding month of last year, according to an official release from the Union Ministry of Commerce and Industry.

India’s Finance Ministry stated on Thursday that the country’s GDP is expected to grow by 6.5 per cent in financial year 2024.

“Growth prospects appear bright, though external factors pose a downside risk,” the Finance Ministry stated in a press conference. “Investment and consumer momentum will underpin solid growth prospects over the upcoming year. Real GDP grew at 7.6 per cent in Quarter 2 of Financial Year 2024 sustaining previous quarter’s momentum.”

It said that while slowing global demand moderates merchandise exports, strong domestic demand keeps imports high.

“The private sector is poised to attain stronger investment growth following the strengthening of corporate and bank balance sheets, supported by the government’s Capex push,” the Ministry stated.

According to the ministry, “Considering the ongoing geopolitical conditions, Brent Crude oil price requires vigilance. Prolonged geo-political uncertainty and tightened financial conditions also pose a challenge to the growth outlook.”

Investment in the private sector is beginning to pick up as funds intended for capital expenditure (capex) raised by corporates through different channels from banks/ financial institutions (FIs), external commercial borrowings (ECBs), and initial public offerings (IPOs) — during the first half of 2023-24 were 60 per cent higher than during the second half of 2022-23.

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