Bank of Baroda (BOB), a government-owned mortgage lender, has forecasted that India's gross domestic product (GDP) will grow by 6.4 percent in the third quarter of fiscal year 2024, attributing this projection to subdued growth in the industrial and agricultural sectors.
Economist Jahnavi Prabhakar stated in a report that for Q3FY24, the economy is expected to expand at a slower pace of 6.4 percent compared to 7.6 percent in Q2FY24, primarily due to muted growth in agriculture and industry. However, Prabhakar noted that the service sector is anticipated to contribute positively to overall growth.
While the economic growth in Q3 FY24 is slightly slower than in Q2, Prabhakar highlighted that growth across sectors is uneven, with some sectors outperforming others.
Looking at the full year, the GDP growth estimate stands at 6.8 percent, with growth in FY25 projected to remain at a similar level of 6.75-6.8 percent, according to Prabhakar.
The International Monetary Fund (IMF) projects India's economy to grow by 6.7 percent for the current fiscal year, revising its forecast upwards by 40 basis points from its previous estimate in October 2023. IMF expects the economy to expand by 6.5 percent for both FY24 and FY25, driven by resilience in domestic demand.
Prabhakar also cited the World Bank's expectations, forecasting a growth of 6.3 percent for FY24 and 6.4 percent for FY25, driven by strong domestic demand, increasing infrastructure spending, and robust private sector credit growth.
In contrast to these forecasts, the National Statistical Office (NSO) advance estimates suggest a growth of 7.3 percent for the current fiscal year. The Reserve Bank of India (RBI) has pegged the country's growth at 7 percent for FY24, with Q3FY24 and Q4FY24 growth projected at 6.5 percent and 6 percent, respectively.
For FY25, RBI projects a growth rate of 7 percent, though downside risks are present due to escalating geopolitical tensions and volatility in financial markets, as per Prabhakar.
Additionally, credit rating agency ICRA recently stated that India's GDP is expected to grow at 6 percent in Q3 FY2024, down from 7.6 percent in Q2 FY2024.
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