India Q1 GDP: Growth may moderate in the coming quarters; should investors be worried?
Chief Economic Advisor V Anantha Nageswaran on Thursday said the economy is expected to grow at 6.5 per cent in the current fiscal notwithstanding deficient monsoon rains. Read more: India Q1 GDP Growth Highlights: India’s Q1 GDP growth rises to one-year high of 7.8%; RBI to maintain FY24 projection Many economists and experts believe India's growth will remain strong going ahead but it will moderate from the current levels because of the base effect, poor monsoon, rising food inflation and global economic slowdown which could impact India's exports. Political uncertainty in the run-up to the General Elections 2024, too, may weigh on economic growth.
Brokerage firm JM Financial's growth expectation for FY24 is pegged at 6.3 per cent. The brokerage firm believes that risk to growth would emanate from the external sector through weak trade activity and political uncertainty. JM Financial said erratic weather-led deficient rainfall may have implications on inflation which could tighten monetary conditions further.
However, the brokerage firm continues to believe that RBI would take a cautious approach and avoid sacrificing growth at this juncture. On a similar line, Kotak Securities expects GDP growth to have peaked out in Q1FY24 and growth rates will gradually taper off. "We revise up our real GDP growth estimate for FY24 by 40 bps to 6.2 per cent and revise down FY25 estimate by 20 bps to 6.3 per cent.
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