India’s GDP to log 6.4% growth in Q3 FY24

Chennai, Feb 23: Government owned mortgage lender Bank of Baroda (BOB) on Friday predicted India’s gross domestic product (GDP) in Q3 FY24 to grow at 6.4 per cent on the back of subdued growth in industrial and agricultural sectors.

“For Q3FY24, the economy is projected to grow at a slower pace by 6.4 per cent against a growth of 7.6 per cent in Q2FY24 led by subdued growth in agriculture and industry sector. Service sector is expected to lift up growth,” Jahnavi Prabhakar, Economist said in a report.

According to Prabhakar, economic growth in Q3 FY24 though is a tad slower than Q2, it is uneven across sectors with a few of them registering better growth than others.

For the full year the estimate is 6.8 per cent. Going ahead for FY25 growth will be at a similar level of 6.75-6.8 per cent, Prabhakar said.

According to the IMF, the Indian economy is projected to grow by 6.7 per cent for the current fiscal, upgrading the estimates by 40bps from its previous forecast in Oct '23. For FY24 and FY25, the economy is expected to grow by 6.5 per cent for both the years, on the back of ‘resilience in domestic demand’.

“On the other hand, the World Bank expects the economy to clock a growth of 6.3 per cent in FY24 and 6.4 per cent in FY25 led by strong domestic demand, growing infrastructure spending along with robust private sector credit growth,” Prabhakar said.

Against these forecasts, as per the NSO advance estimates, the economy is expected to grow by 7.3 per cent for the current fiscal. RBI has pegged the country's growth at 7 per cent in FY24 with Q3FY24 and Q4FY24 growth at 6.5 per cent and 6 per cent respectively.

For FY25, it is projected at 7 per cent with downside risk emerging from escalation of geopolitical tensions and volatility in the financial markets, Prabhakar said.

Recently credit rating agency ICRA said India’s GDP will grow at 6 per cent in Q3 FY2024 from 7.6 per cent in Q2 FY2024.