Economic growth pegged at 7.3% in FY24; higher than FY23
The Indian economy grew 7.7% in the year's first half, prompting economists to revise their growth forecast upward, but the first advance estimates based on first eight months data, point to an even higher growth.
The Reserve Bank of India had pegged growth at 7%, whereas the ET poll median suggested 6.7% growth.
The government estimates highlight the economy may grow 6.9% in the year's second half, spurred by higher investment and manufacturing.
“India’s GDP growth for FY24 as per FAE at 7.3% has come as a positive surprise. The stellar growth has been led by the manufacturing sector and construction sector, while there has been some moderation in the services sector growth,” said Rajani Sinha, chief economist, CareEdge.
Investment rate, measured as gross fixed capital formation as a proportion of nominal GDP, is expected to rise to a nine-year high of 29.8% in FY24, compared with 29.2% in the previous year.
Economists noted that the 10.3 % growth in gross fixed capital formation, a proxy for investment, in FY24 reflects the sustained focus of the government on capex.
“This is more heartening because it has come on high base of FY23, whereby GFCF had grown 11.4% yoy,” said Sunil Kumar Sinha, principal economist and Paras Jasrai, senior analyst, India Ratings & Research.
