NEW DELHI: Experts expect moderation in the GDP growth for the third quarter of FY24 at 6%-7% because of slowdown in agriculture and industrial sectors. The government will release the GDP data on February 29.
ICRA predicts a moderation in GDP growth to 6.0% in Q3FY24 from 7.6% in Q2FY24. The gross value added (GVA) growth is also expected to ease to 6.0% from 7.4% in the previous quarter, influenced by the industrial and agriculture sectors.
The industrial sector is anticipated to face challenges due to adverse base effects and volume expansion deceleration, despite favourable profitability in some sectors. A slight contraction in government spending by the Government of India and state governments in Q3FY24 is likely to impact GVA growth.
Aditi Nayar, Chief Economist at ICRA Ltd, highlights factors such as lower industrial volume growth, slowing government expenditure, and an uneven monsoon, which are expected to contribute to the slowdown in GDP growth to 6.0% in Q3 FY24.
As per Bank of Baroda, the GDP growth is likely to slow down to 6.4% in the third quarter of FY24, following a robust 7.6% increase in the previous quarter.
This shift in growth is not uniform across sectors, with some showing more resilience than others. Agriculture is anticipated to experience a modest 2.1% growth in Q3FY24, Meanwhile, the industrial sector is set to witness a slowdown, with an 8% growth rate in Q3FY24 compared to the significant 13.2% growth in Q2. Both mining and manufacturing are expected to show growth rates of 6% and 8.6%, respectively, owing to a higher base effect.