Indian economy to grow by 6.3% in FY24: Survey

The survey also noted several downside risks to growth, including geopolitical stress, slowing growth in China, the delayed impact of monetary tightening, and below-normal monsoons

October 17, 2023

The median growth forecast for agriculture and allied activities in 2023-24 is 2.7%

The industry and services sectors are anticipated to grow by 5.6% and 7.3% in the current fiscal year

The median forecast for inflation based on the Consumer Price Index (CPI) for 2023-24 is 5.5%

The government's emphasis on capital expenditure has attracted private investments and supported growth momentum

The Indian economy is expected to grow by 6.3% in FY24, with a growth range of 6.0% to 6.6%, according to the latest Economic Outlook Survey released by the Federation of Indian Chambers of Commerce and Industry (FICCI) on Monday. The survey, conducted in September 2023, drew responses from leading economists representing various sectors.

The median growth forecast for agriculture and allied activities in 2023-24 is 2.7%, a moderation from the 4.0% growth reported in 2022-23. This slowdown is attributed to the impact of the El Nino effect on the spatial distribution of rainfall during the monsoon season. On the other hand, the industry and services sectors are anticipated to grow by 5.6% and 7.3% in the current fiscal year.

The survey also noted several downside risks to growth, including geopolitical stress, slowing growth in China, the delayed impact of monetary tightening, and below-normal monsoons. As per the survey, the median GDP growth is projected to slow down to 6.1% and 6.0% in Q2 and Q3 of 2023-24, respectively, after posting a high growth of 7.8% in Q1.

The median forecast for inflation based on the Consumer Price Index (CPI) for 2023-24 is 5.5%, with a range of 5.3% to 5.7%. Survey participants expressed uncertainty about the course of inflation, noting that while the CPI inflation rate may have peaked, there are upside risks to prices. 

Survey participants anticipated that the CPI inflation rate would remain above the Reserve Bank of India’s targeted level for the remainder of the financial year. Regarding the Reserve Bank of India’s policy actions, economists suggested that a repo rate cut is expected by the end of Q1 or Q2 of the next fiscal year, 2024-25.

In terms of investments, participants noted that the government’s emphasis on capital expenditure has attracted private investments and supported growth momentum. However, a full recovery in private investments is expected to take more time and will likely be driven by a pickup in consumption activity, both domestically and externally.

Source: Economic Times

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