Page 23 - Policy Economic Report - June 2024

POLICY AND ECONOMIC REPORT
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In the January-March quarter, India's GDP growth surpassed expectations, reaching 7.8 per cent, although
this was a decline from 8.4 per cent in the third quarter. For the entire fiscal year 2023-24, GDP growth
has been revised upwards to 8.2 per cent from the second advance estimate of 7.6 per cent, according to
the Ministry of Statistics and Programme Implementation data released on May 31.

According to World Bank, India, the largest economy in South Asia, has significantly contributed to
regional growth, particularly through its manufacturing and services sectors. The country’s growth rate
for FY24 is estimated at 8.2 per cent, a notable increase of 1.9 percentage points from earlier projections,
the report said.

India’s economic growth has been driven by its industrial and services sectors, which have offset a
slowdown in agricultural production caused by monsoon disruptions. Domestic demand remains strong,
buoyed by infrastructure investments, even as post-pandemic pent-up consumption demand eases, the
World Bank report noted. Inflation in India has remained within the Reserve Bank’s target range of 2-6
per cent since September 2023, contributing to a stable economic environment, the report added.

10. S&P retains India FY25 GDP growth estimate at 6.8%; forecast lower than RBI

S&P Global Ratings retained India's GDP growth forecast for the current financial year at 6.8 per cent and
said high interest rates and lower fiscal spur would temper demand. In its economic outlook for Asia
Pacific, S&P Global Ratings said India's economic growth continues to grow on the upside with the
economy growing 8.2 per cent in fiscal year 2023-24.

For the fiscal years 2025-26 and 2026-27, S&P projected growth rates of 6.9 per cent and 7 per cent,
respectively.

S&P's estimates for FY'25 is lower than that of the Reserve Bank of India (RBI), which earlier this month
projected the Indian economy to expand at 7.2 per cent in the current fiscal, on the back of improving
rural demand and moderating inflation.

While rating agency Fitch estimates India's growth at 7.2 per cent in FY'25, the Asian Development Bank
(ADB) estimates India's GDP to grow at 7 per cent. Moody's Ratings and Deloitte India estimates India's
GDP to grow at 6.6 per cent in 2024-25 fiscal, while Morgan Stanley projects growth rate of 6.8 per cent.

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