India's economy is set to grow by 7.4% in the fourth quarter of FY2023-24, while the FY24 GDP growth is likely to touch 8% on all leading growth indicators showing improved numbers, according to the latest report. "The in-house developed SBI Artificial Neural Network (ANN) model with 30 high-frequency indicators points to the quarterly GDP growth for the Q4 FY24 to have a reading of 7.4%," the Economic Research Department of the State Bank of India (SBI) said in its Ecowrap note.

SBI's GDP growth estimates are in line with the Reserve Bank of India's(RBI) estimates for Q4 FY24, which has put real GDP growth forecast at 7.3%, Q1 FY25 growth at 7.5% and full-year FY25 economic growth at 7.0%. India's economic growth had surged to 8.4% in Q3, 7.6% in Q2 and 7.8% in Q1 FY24. The government will announce GDP estimates for the fourth quarter and the fiscal year on May 31, 2024.

The SBI report says leading indicators show a secular growth trend across urban or rural landscapes though the incremental growth in the rural economy is picking up faster. "Passenger vehicle sales, airport passenger traffic, GST collection, credit card transactions, petroleum consumption and toll collection are all indicating improving urban economic momentum. The rural economy, on the other hand, is picking up...diesel consumption and two-wheeler sales are showing an uptick in rural economic momentum," says the report.

The ‘above normal’ monsoon estimates are also expected to augur well for the rural economy by boosting domestic supplies of pulses, oilseeds and cereals. Additionally, the India Meteorological Department (IMD) has said La Nina is expected to develop during the latter half of the 2024 monsoon season while Indian Ocean Dipole (IOD) is expected to be positive, both of which indicate a good monsoon on the anvil.

The corporate India's performance in Q4 FY24 has also been "strong", though there is some pressure on profitability. "Around 2,400 listed entities of Indian Inc. reported top-line growth of 9% in Q4 FY24 while EBITDA grew by around 21%, as compared to the almost flat top line in all previous quarters of FY24. However, PAT growth declined to around 12% from 42% in the previous two quarters on a YoY basis," writes Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India.

Besides, corporate GVA grew by around 18% in Q4 FY24 as compared to 20% in Q4 FY23 and 26% in Q3 FY24. "Sectors such as banking, automobile, capital goods, consumer durables, pharma etc., have reported excellent numbers during the quarter ended March’24," the report says.

Global growth, as a respite, remains resilient, with easing inflationary pressures and tight employment conditions globally reinforcing optimism in spite of geopolitical and extreme weather event risks likely to metamorphose into turbulent headwinds going forward, the SBI report adds.

The International Monetary Fund (IMF), in its latest world economic outlook (WEO April 2024), had raised the global growth forecast for 2024 to 3.2%, 10 bps higher than its January 2024 update and expected the global economy to grow at the same pace in 2025, a respite from its earlier gloomy predictions.

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.