NEW DELHI: GDP growth in the first quarter of the current financial year (FY24) might surprise on the higher side as experts estimate the growth to be over 8 per cent. Various estimates suggest the economy might have grown in the range of 8.2 to 8.5 per cent in the first quarter (Q1), led by strong public and private investment.
Rating agency ICRA expects the Q1 GDP growth to be around 8.5 per cent, while SBI estimates the growth to be at 8.3 per cent. Rating agency Crisil puts the growth rate at 8.2 per cent. All these estimates are better than RBI’s estimate of 8 per cent.
The GDP in the first quarter of FY23 grew at 13.1 per cent, and at 6.1 per cent in the fourth quarter. The first quarter GDP growth number will be announced on August 31.
According to an SBI report, India’s GDP in the first quarter of FY24 is likely to be 8.3 per cent on account of continued positive activity, the government’s push for capex, robust quarterly corporate earnings and double-digit credit growth.
The SBI composite leading indicator (CLI) Index (a basket of 43 leading indicators that includes parameters from almost all the sectors) based on monthly data shows continued positive economic activity in Q1 compared to Q4FY23.
“There has been a surge in capital expenditure in Q1, with the central government spending 27.8 per cent of budget, while states at 12.7 per cent of budgeted estimate. States like Andhra Pradesh, Telangana, and Madhya Pradesh where elections are due have registered capital expenditure growth of up to 41 per cent,” the SBI report says.
ICRA Ratings expects GDP growth to be 8.5 per cent in April-June owing to base effect, healthy growth in the manufacturing sector and recovery in the services sector. ICRA estimates the industrial gross value addition (GVA) growth to have risen to 7.3 per cent in Q1 FY24 from 6.3 per cent in Q4 FY23, boosted by the manufacturing sector. It sees manufacturing value addition to growing at 8.0 per cent in the first quarter, benefitting from the uptick in volumes and the expansion in margins across several sectors owing to lower commodity prices.
On the Services sector, ICRA says as many as 11 of the 14 high-frequency indicators pertaining to the services sector recorded year-on-year growth in Q1, with the pace of expansion ranging from 0.3 per cent (telephone subscribers) to 18.6 per cent (domestic airlines passenger traffic). The SBI report pegs the full-year GDP growth to be higher than the RBI’s estimate of 6.5 per cent. However, ICRA maintains the FY24 GDP growth at 6 per cent.