Indian economy beats growth estimates Indian economy beats growth estimates Indian economy beats growth estimates After India’s GDP beat estimates to grow at 7.2 per cent in FY22-23, SBI’s research report Ecowrap upgraded FY24 growth estimates to 6.7 per cent from 6.2 per cent. “We are now factoring in a pick up in growth momentum in FY24. We are upgrading our baseline forecast from 6.2 per cent to 6.7 per cent. Continuing on the path of strong activity in FY23, we project real GDP growth for FY24 at 6.7 per cent with Q1 at 7.8 per cent, Q2 at 6.5 per cent, Q3 at 6.3 per cent and Q4 at 6.2 per cent, amid broadly balanced risks,” it said.
This comes after the Indian economy grew at 7.2 per cent in FY23 as against the NSO’s earlier estimate of 7 per cent and SBI’s estimate of 7.1 per cent. The better-than-expected growth is primarily due to the 6.1 per cent growth in the fourth quarter of FY23.
The report added that in FY23, manufacturing was the only sector to exhibit muted growth of 1.3 per cent, even though in Q4 manufacturing jumped by 4.5 per cent. Agriculture grew by 4 per cent, mining and quarrying by 4.6 per cent, construction by 10 per cent, ‘Financial, Real Estate & Professional Services’ grew by 7.1 per cent and ‘Trade, Hotels, Transport, Communication & Services related to Broadcasting’ grew by 14 per cent.
“The construction sector has remained upbeat due to sustained impetus on infrastructure spending by the government,” the report said. Investment activities, driven by government’s capex push, were at an all-time high. New investment announcements, led by private sectors, touched an all-time high of Rs 37 lakh crore in FY23, as compared to Rs 20 lakh crore in FY22.
The overall economic strength remains intact despite some slowdown in demand, the report added. “The private investment activity looks robust and domestic monetary and credit conditions remains supportive of growth in FY24,” it said.
The SBI Ecowrap said that growth in private consumption saw a deceleration in FY23 to 7.5 per cent, while government consumption registered a growth of 0.1 per cent in real terms.
When it comes to wages, nominal wages in rural areas increased at 6 per cent year-on-year on an average in fourth quarter of FY23. Wages of agricultural workers grew at an even higher rate. “When we consider real wages, the rate of growth has been modest, below 0.5 oer cent yoy growth for all occupations as well as for agri workers. FMCG companies, in the listed space, reported 14 per cent growth in top line while bottom line grew by 28 per cent in Q4FY23 as compared to previous year. However, some of the companies have reported decline in rural volume due to sluggish demand,” the report stated.
Meanwhile, the World Bank had, before the release of the GDP data, predicted India’s growth in FY24 to be at 6.3 per cent, while the Reserve Bank of India, in the last MPC predicted India’s growth in FY24 t 6.5 per cent. The International Monetary Fund (IMF) had projected India’s GDP growth for financial year 2023-24 at 5.9 per cent.