Ratings agencies cheer India’s GDP surge buoyed by infra push, strong DPI
IMF raised its growth forecast for India to 6.3% for FY24 after Indian economy expanded by 7.8% in June qtr. Morgan Stanley is bullish and sees this as India’s decade
image for illustrative purpose
New Delhi: India has emerged as the world’s fastest growing economy amidst a worldwide economic slowdown and continues to be a bright spot going ahead with the IMF upgrading its growth forecast for the country twice this year.
India’s GDP grew at an impressive 7.6 per cent in the July-September quarter of the current financial year despite a slowdown in agriculture as the robust performance of the manufacturing sector and high government expenditure on big ticket infrastructure projects kept up the growth momentum.
The growth in the second quarter is a tad lower than the first quarter growth of 7.8 per cent due to the erratic monsoon hitting the farm sector. India’s GDP growth rate for the first half of 2023-24 now works out to 7.7 per cent.
This has prompted the RBI to raise its growth forecast for India’s economy to seven per cent in 2023-24 from 6.5 per cent earlier. The GDP growth rate in the first three quarters of 2024-25 has been pegged at 6.7 per cent, 6.5 per cent and 6.4 per cent respectively.
The IMF raised its growth forecast for India in the current financial year to 6.3 per cent after the data released by the Statistics Ministry on August 31 showed the Indian economy expanded by 7.8 percent in April-June. At the same time the multilateral lending agency has cut its prediction for China’s growth to five per cent.
India’s economic growth rate is expected to remain strong, supported by macroeconomic and financial stability, according to an IMF assessment report published on December 19.
“Going forward, the country’s foundational digital public infrastructure and a strong government infrastructure program will continue to sustain growth,” the report added.
It also states that India’s current account deficit is expected to improve to 1.8 percent of GDP in FY2023/24 as a result of resilient services exports and, to a lesser extent, lower oil import costs as crude oil prices have declined in the international market.
Amidst a challenging global macroeconomic environment, the Indian economy is exhibiting “a quickening growth momentum,” with resilience and financial stability, according to the RBI’s Financial Stability report released on December 28.
