Advance GDP estimates: NSO likely to peg FY24 GDP growth at 7%

With the National Statistical Office (NSO) releasing its first advance economic growth estimates today, India is likely to record FY 2023-24 gross domestic product (GDP) largely in line with the Reserve Bank of India's estimates at around 7%. At this rate, the country is a natural leader globally in terms of economic growth.

An increase estimate for the FY24 GDP is expected widely since the central bank in its last MPC meeting had also estimated the growth forecast at 7% for FY24, up from 6.5% estimated earlier.

For the next fiscal year, the RBI said the country could see 6.7% growth in April-June FY25.

In the wake of the strong GDP growth in Q2 FY24, many other financial institutions have also raised the growth forecast for 2023-24. SBI Research, the research wing of state lender SBI, said the overall growth for the full fiscal would be around 7%.

The Asian Development Bank (ADB) also raised its economic forecast for India to 6.7% from 6.3% following faster-than-expected expansion in July-September, driven by double-digit growth in industry.

Comparatively, China's economy is projected to expand by 5.2% this year, against a previous forecast of 4.9%, after household consumption and public investment boosted growth in the third quarter.

The ICRA's full fiscal year GDP estimate has also moved up to 6.5% from 6.2% projected earlier. However, it's still lower than the RBI-led MPC's 7% economic growth forecast.

After India’s economy recorded stronger-than-expected growth of 7.6% in Q2 FY2024, led by industry, many financial institutions have raised the growth forecast for the full financial year 2023-24 (FY24). The Q2 GDP growth was slightly lower than the 7.8% growth seen in the April–June quarter of the fiscal year.

According to the latest report by the rating agency S&P Global, India is set to become the third-largest economy by 2030. It expects the country to be the fastest-growing major economy in the next three years.

S&P, however, said a paramount test for India will be to become the next big global manufacturing hub. India, Vietnam and Mexico are the three emerging markets that could benefit from reconfiguring global supply chains owing to strong and stable trade ties with the US, it said.

Notably, despite global headwinds, the Indian economy is one of the fast-growing economies in the world. The International Monetary Fund (IMF) has called India one of the "star performers" that's estimated to contribute 16% to the global growth in 2023-24.

Nada Choueiri, the mission of India at IMF, in December 2024 had appreciated India's "very robust rate" of growth, saying when compared to peer countries, India is "one of the star performers".