India’s GDP to grow at 7.3% in FY24: Govt’s 1st advance estimates

The Indian economy could see a robust 7.3% growth in FY 2023-24 as compared to a 7.2% GDP growth rate during the last financial year, with construction seeing double digits growth of 10.7% this year, the first advance estimates by the statistics and programme implementation ministry's (MoSPI) national statistical office (NSO) show.

"Real GDP or GDP at Constant (2011-12) Prices in the year 2023-24 is estimated to attain a level of ₹171.79 lakh crore, as against the Provisional Estimate of GDP for the year 2022-23 of ₹160.06 lakh crore, released on 31st May 2023. The growth in real GDP during 2023-24 is estimated at 7.3 per cent as compared to 7.2 per cent in 2022-23," the NSO says.

The nominal GDP or GDP at current prices in FY24 is estimated at ₹296.58 lakh crore vs the provisional estimate of ₹272.41 lakh crore for FY23. "The growth in nominal GDP during 2023-24 is estimated at 8.9 per cent as compared to 16.1 per cent in 2022-23."

The current GDP projections by the NSO are higher than most of the estimates by financial institutions and government organisations.

The RBI in its monetary policy committee (MPC) meeting last month had revised the FY24 GDP growth forecast to 7% from 6.5% earlier.

The central bank's note said it was a "conservative estimate" since high growth was observed in high-frequency indicators in October and November 2023.

India's economy recorded stronger-than-expected growth of 7.6% in Q2 FY2024. The Q2 GDP growth was slightly lower than the 7.8% growth seen in the April–June quarter of the fiscal year.

In the wake of the strong GDP growth in Q2 FY24, many financial institutions raised the growth forecast for 2023-24 to 7%, though some kept their estimates at 6.5%. 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) 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.

The ICRA's full fiscal year GDP estimate also moved up to 6.5% from 6.2% projected earlier.

Global agency S&P said India will become the third-largest economy by 2030. S&P, however, said a paramount test for India would 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.

The IMF, in its 2023 Article IV consultation report in December 2023, said the year 2023 saw "robust growth" when it comes to India. For the next financial year, the IMF's estimates showed its real GDP might grow 6.3% each in FY24 and FY25.