India's Q4 FY24 GDP likely to have grown at 6.1-6.7 pc: Economists

India’s GDP in the fourth quarter of financial year 2023-24 is expected to have grown within the range of 6.1-6.7 per cent, lower than over 8 per cent rate recorded in the previous three quarters, according to projections by various economists.

The GDP numbers for the fourth quarter (January-March 2024) and the provisional estimates for the 2023-24 fiscal year are scheduled to be released by the government on May 31.

According to economists, the expected growth in 2023-24 fiscal is estimated to be in the range of 7.6-7.8 per cent.

The Indian economy grew 8.2 per cent in the June quarter, 8.1 per cent in the September quarter and 8.4 per cent in the December quarter of 2023-24.

Kotak Mahindra Bank Chief Economist Upasna Bhardwaj said high frequency data suggests robust growth across the board. Also, trade and hotels have held up in the fourth quarter.

”Manufacturing activities have also been good, and construction linked and investment segments should be doing better, but agriculture sector growth could be a laggard and see contraction during the quarter. We are expecting 6.1 per cent GDP growth for the fourth quarter and as a result, the full-year number for GDP growth should be close to 7.6 per cent,” Bhardwaj said.

India’s GDP expanded 6.1 per cent in the March quarter of 2022-23 fiscal, as per May 31, 2023 estimates. The growth for full fiscal 2022-23 was 7 per cent.

”We are looking at some moderation in economic activity in the services segment and also on the industrial side across the board. That is the reason why Gross Value Added (GVA) numbers are expected at 5.7 per cent for the fourth quarter, while 6.1 per cent is GDP number,” she added.

GDP is the total value of goods and services produced in a given period, while GVA is GDP minus net taxes (gross tax collection minus subsidy).

As far as the current fiscal (2024-25) is concerned, Kotak Mahindra Bank expects growth to be 6.6 per cent but with an upward bias. Bhardwaj said rural consumption is likely to pick up pace, but exports growth could be impacted in the second half of the current fiscal.

”At the moment, exports have held up pretty well. We haven’t seen too much of an impact of any global disruptions of demand on exports. But we do expect there will be some impact of that going ahead. That is one place where we expect growth to take a hit,” she said.

The rural consumption demand is going to pick up pace, while we might see some saturation in the urban demand side. Hence, there could be some positive impact on consumption in the current fiscal, Bhardwaj said.

EY India Chief Policy Advisor DK Srivastava said both domestic and international institutions are forecasting a robust growth of around 7 per cent for India in the fiscal year 2025.

”It is anticipated that the GDP growth in the fourth quarter of the fiscal year 2024 might surpass 6.5 per cent, leading to an annual growth close to 7.8 per cent as projected by the IMF,” Srivastava said.

Another rating agency, India Ratings & Research expects the country’s GDP growth rate for the March quarter at 6.2 per cent for 2023-24.

Domestic rating agency ICRA on Tuesday projected India’s GDP growth to moderate to a four-quarter low of 6.7 per cent in March quarter of 2023-24 fiscal. For the full 2023-24 fiscal, ICRA estimates GDP growth to come in at 7.8 per cent.

The Reserve Bank, in its monetary policy review in April, projected GDP growth for 2023-24 at 7 per cent.