News

Published: January 5, 2024
Updated: January 5, 2024

GDP Figures to be out today: India's Economic Growth Surges to 7% Amidst Optimistic Projections

India is poised to achieve an impressive 7% growth for the fiscal year 2023/24, exceeding earlier estimates. The Reserve Bank of India's (RBI) revised forecast and the proactive measures by Prime Minister Narendra Modi have played pivotal roles in this economic upswing.

Optimistic Projections and Revised Estimates:

The National Statistical Office is expected to release the first advance GDP estimates today, reflecting the nation's robust economic performance. The RBI's conservative estimate of 7% growth for the current fiscal year, up from 6.5%, underscores the positive outlook. Deputy Governor Michael Patra termed it as a conservative estimate, citing strong growth in high-frequency indicators.

Government's Economic Boost:

Prime Minister Modi's strategic increase in state spending on infrastructure projects aims to stimulate economic growth amidst subdued consumer spending. Analysts anticipate this move to enhance his electoral prospects in the upcoming national elections scheduled before May.

Surpassing Expectations:

The Indian economy outperformed expectations, growing at 7.6% year-on-year in the September quarter and maintaining momentum at 7.8% in the previous quarter. Private economists have upwardly revised yearly growth estimates, reflecting the nation's resilience.

Global Recognition:

S&P Global Ratings predicts India to remain the fastest-growing major economy for the next three years, positioning it to become the world's third-largest economy by 2030. India's current fifth-largest economy status is expected to grow at 6.4% this fiscal year, with an anticipated acceleration to 7% by fiscal 2027.

Comparative Growth Trends:

In contrast, S&P expects China's growth to decelerate, slowing to 4.6% by 2026 from an estimated 5.4% this year. This positions India favourably in the global economic landscape.

Monetary Policy and Inflation Considerations:

Economists suggest that the RBI's Monetary Policy Committee (MPC) is unlikely to reduce the benchmark policy rate of 6.5% in the coming quarters. This cautious approach is attributed to potential risks, including a spike in food inflation during the election year.

India's economic trajectory showcases resilience and optimism, with the projected 7% growth for FY2024. As the nation continues its upward trajectory, strategic government initiatives and global recognition position India as a key player in the evolving global economic landscape.