Analysts raise FY24 GDP growth forecast

MUMBAI: A day after stronger-than-expected fourth quarter gross domestic product (GDP) data surprised the market, several global brokerages and economists have raised their GDP growth projections for India. Brokerages in including UBS, JP Morgan, Citi and Goldman Sachs have revised up their growth forecast for Indian economy by 30 to 70 basis points for the current fiscal.

The upward revisions have come after the after the data released by the National Statistics Office (NSO) showed that the Indian economy grew at 7.2 percent in FY23 as against earlier estimate of 7 percent. Beating the estimates of analysts and economists, Indian economy expanded by 6.1 percent in the January-March quarter of the last fiscal boosted by boosted by higher growth in services, exports, and agriculture. This growth has fueled the optimism about prospects of Indian economy, going forward. JP Morgan has raised its forecast for the country’s annual growth by 50 basis points to 5.5% for fiscal 2024.

The brokerage added the growth could see upsides if the central government can pull off the ‘very strong increase’ in budgeted capex for fiscal 2024 and convince states to do the same. Swiss brokerage firm UBS has raised its GDP growth projection to 6.2% for FY24 from 5.5% while Citi has revised up its growth projection to 6.2% for the current fiscal from its earlier estimate of 5.9%. “Q4 GDP growth has prompted us to revise upwards FY24 real GDP growth forecast to 6.2% from 5.9% earlier although we lower our nominal GDP growth forecast to 10%.

Stronger growth/ lower inflation is like a ‘Goldilocks’ situation for the policy makers. Favourable for a longish ‘pause’ from the RBI rather than a quick pivot to an easing cycle,” said Samiran Chakraborty, Citi. The RBI has also said in its recent report that growth momentum is likely to be sustained in 2023-24 with inflation expected to ease supported by global and domestic factors. SBI has revised its growth projection for the economy by 50 bps to 6.7%.

“We are factoring in a pick up in growth momentum in FY24. We are upgrading our baseline forecast from 6.2% to 6.7%,” said Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI. “Against the global headwinds, the economy is showing strong signs of resilience. Continuing on the path of strong activity in FY23, we project real GDP growth for FY24 at 6.7% with Q1 at 7.8%, Q2 at 6.5%, Q3 at 6.3% and Q4 at 6.2%, amid broadly balanced risks,” he added