India's Q4 GDP growth expected to moderate to 6.7%, says rating agency ICRA
Indian economy's report card moving away from the red: Mint tracker "For the full-year FY24, ICRA expects the GDP and GVA growth to print at 7.8% and 7%, respectively, unless the growth for 9M FY2024 (April-December 2024) is revised," it added. Senior government officials said the divergence in GDP and GVA data during Q3 could be attributed to reduced fertiliser subsidy disbursements, suggesting the government hadn't fully disbursed these subsidies, leading to a disparity between GDP and GVA.
In the revised budget estimates for FY24, the government increased the allocation for fertiliser subsidy to ₹1.89 trillion from the ₹1.75 trillion that it budgeted initially. Also read: Biden's view on India's economy is both bizarre and bothersome Meanwhile, ICRA estimates industrial GVA growth to moderate to 7.9% in Q4 from 10.4% in Q3, led by all four sub-sectors – manufacturing (to +8.0% from +11.6%), electricity (to +7.5% from +9.0%), construction (to +8.5% from +9.5%), and mining and quarrying (to +5.5% from +7.5%).
This, coupled with slower growth in the Index of Industrial Production (IIP), suggests that year-on-year growth in manufacturing GVA is likely to have eased in Q4, with the adverse base (+0.9% in Q4 FY23; -4.8% in Q3 FY23) also likely to weigh on growth, the rating agency added. Services GVA is expected to ease slightly to 6.2% in Q4 from 7% in Q3 owing to a deceleration in services exports, while investment activities are expected to remain healthy, ICRA said.
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