India to emerge as the fastest-growing G20 economy in 2024

India is currently the fifth-largest economy in the world

April 1, 2024

Finance Minister Nirmala Sitharaman recently stated that India’s economy is slated to grow by more than 8% between January and March 2024

Upward revisions in India's growth projections by S&P, Morgan Stanley, and Moody's signal a promising outlook for the nation's economy

S&P revised India's FY24 forecast to 7.3% and projected a decline in inflation to 5.1% in FY25

Recent growth figures and the finance minister's assertion of GDP growth prompt reconsideration of India's growth narrative by rating agencies

Recent upward revisions in India’s growth projections by S&P, Morgan Stanley, and Moody’s signal a promising outlook for the nation’s economy. S&P raised its growth forecast from 6.4% to 6.8%, Morgan Stanley from 6.1% to 6.8%, and Moody’s from 6.6% to 8% for the current fiscal period.

These adjustments reflect growing optimism – both domestically and globally – fuelled by robust manufacturing and infrastructure spending. These revisions tie in with the current trajectory of India which places it as a leader of the G-20 economies in terms of economic growth that has been propelled by strong government expenditure and domestic consumption.

The Finance Minister recently stated that India is expected to grow by over 8 % between January and March 2024. The nation has emerged to become the 5th largest global economy and the government plans on growing it into the 3rd largest one in the world by 2027.

Under the leadership of Prime Minister Modi, the administration’s significant increase in capital expenditure – from 2% of GDP nine years ago to 3.8% in the interim budget of 2024 – underscores the commitment to economic expansion. With Rs 11.11 lakh crore allocated for capital expenditure, the government aims to sustain growth momentum by marking an 11.1% increase from the previous budget.

S&P attributes the upward revision to India’s growth forecast to a better-than-expected start to the year, supported by a favourable global economic environment and anticipated easing of domestic financial conditions. The firm also revised India’s FY24 forecast to 7.3% and projected a decline in inflation to 5.1% in FY25.

Although the government’s latest forecast stands at 7.6% for FY24, recent growth figures and the finance minister’s assertion of GDP growth exceeding 8% in the current fiscal year prompt reconsideration of India’s growth narrative by rating agencies.

Source: Economic Times

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