Expectations On The Upcoming GDP Data

A nation's growth trajectory is measured generally by gross domestic product (GDP). With a day left for India's Q4 GDP figures for the current fiscal as well as the financial year 2024 to be out, a prominent economist has predicted as to what could be the numbers, along with the RBI and IMF's recent projections.

As per Madhavi Arora, a lead economist from Emkay Global Financial Services, the 4Q GDP could be estimated at 5.1% while the same could be pegged at 7% for the financial year 2023.

In its annual report, released on Tuesday, the RBI has mentioned that it expects the Indian economy to have recorded a growth of 7% in real GDP in the previous fiscal amidst strong global headwinds. India has contributed more than 12% to global growth on average during the last five years.

It further stated in the report that the Nominal GDP for 2023-24 as per the budget estimate has been projected at Rs 3,01,75,065 crore assuming 10.5% growth over the preceding year (viz., Rs 2,73,07,751 crore as per the first advance estimates for 2022-23 released by the Ministry of Statistics and Programme Implementation, Government of India, on 6th January 2023).

Whereas the International Monetary Fund (IMF) projects that with an average growth rate of 5.5% over the past decade, as per news sources. India has already become the fastest-growing economy in the world and is set to double its current annual GDP of close to USD 3.5 trillion to USD 7 trillion by 2027 and to USD 10 trillion by 2030. IMF has pegged India as the 'bright spot' and a key contributor to global growth that will alone contribute 15% of the global growth in 2023.

However, Arora believes that for FY24, the growth will slow down. "Growth in Q4 is expected to be driven by momentum in trade, hotel and transportation while government spending may have also picked up. There are nascent signs of consumption recovery. However, it is still led by urban more than rural. Besides, net exports were less of a drag to growth amid a lower trade deficit and higher services net exports. Therefore, we expect growth to slow to 5.7% in FY24," she added.