Moody's raises India's 2024 GDP forecast to 6.8% from 6.1%
Moody's on Monday raised India's GDP growth estimate to 6.8 per cent from 6.1 per cent for 2024.
India's economic growth in the three months through December was much higher than most estimates. This was attributed to a sharp fall in key subsidies which provided a boost to GDP, reported Reuters, citing two government officials.
India's economy grew 8.4 per cent during the October-December quarter, its fastest pace in one-and-half years, and much faster than the 6.6 per cent estimated by economists polled by Reuters.
However, gross value added (GVA), which is a measure of the total value of goods and services produced in the economy and excludes indirect taxes and subsidies, grew 6.5 per cent, prompting economists to say that GDP data overstated growth trends.
«The wide divergence between the GVA and GDP in the October-December quarter was mainly due to a sharp fall in subsidies in that quarter largely because of lower payouts on fertilizer subsidies like Urea,» a senior government official said on Friday.
«The above-8% real GDP print should be read with caution given the large gap with GVA, decline in agriculture activity and two-paced economic growth (investment far outpacing consumption),» Reuters quoted Citi economist Samiran Chakraborty as saying in a note.
The divergence is at a 10-year high, said Neelkanth Mishra, chief economist at Axis Bank, who does not expect this to continue and sees the economy growing 6.5% in the next financial year.
India's GDP growth is estimated at 7.6% for the year ending
