Industry body FICCI's Economic Outlook Survey has pegged the annual median GDP growth forecast for the year 2023-24 at 6.3%- with a minimum and maximum growth estimate of 6.0% and 6.6%, respectively. Ficci said the downside risks to growth are geo-political stress, China slowdown, and below par monsoon among others.

"The median growth forecast for agriculture and allied activities has been put at 2.7% for 2023-24. This marks a moderation vis-à-vis growth of about 4.0% reported in the year 2022-23. The El Nino effect has had an impact on the spatial distribution of rainfall this monsoon season. Industry and services sector, on the other hand, are anticipated to grow by 5.6% and 7.3% respectively in the current fiscal year," Ficci said in a release on Monday.

"Persisting headwinds on account of geopolitical stress, slowing growth in China, lagged impact of monetary tightening and below normal monsoons pose as downside risks to growth. According to the survey results, median GDP growth is estimated to slowdown to 6.1% and 6.0% in Q2 2023-24 and Q3 2023-24 respectively – after posting a four-quarter high growth of 7.8 per cent in Q1 2023-24," said the Ficci economic outlook survey.

The report pegged the median forecast for CPI based inflation at 5.5% for 2023-24, with a minimum and maximum range of 5.3% and 5.7% respectively.

"The survey participants opined that the course of inflation remains uncertain. The CPI inflation rate may have peaked, but upside risks to prices remain on fore. Prices of cereals have remained sticky. The acreage coverage of pulses and oilseeds under kharif crops has reported a contraction (as of September 30, 2023)," the report added.

According to Ficci, survey participants noted that CPI inflation rate is expected to remain above Reserve Bank of India’s targeted level for the remaining part of the financial year. "On RBI's policy action, economists were of the view that a cut in the repo rate is expected only by the end of Q1or Q2 of the next fiscal year 2024-25," said the Ficci report.

"On investments, participants mentioned the government’s thrust on capital expenditure has led to a crowding in of private investments and provided support to growth momentum. However, a full-fledged momentum in investments will take some more time to build in. It was felt that going forward any further recovery in private investments will be led by a pick-up in consumption activity – both domestic and external," it added.

FICCI's Economic Outlook Survey

Ficci Economic Survey pegs FY24 median GDP growth at 6.3%