Delhi, April 27: Acuite Ratings and Research, a credit rating agency, predicts that India’s Gross Domestic Product (GDP) growth will be at 6% for the fiscal year 2023-24.
In its monthly report on the economy, Acuite highlights that while the global macro economy remains unstable and inconsistent, the Indian economy is demonstrating strength and stability.
Many lead indicators at the start of 2023 continue to display resilience, with incremental data from February and March 2023 faring better than that of January 2023.
Acuite highlights that domestic demand is strong and showing vigour, while external demand is slowing and capturing a reduced run-rate of merchandise exports, which is partly due to the moderation of commodity prices.
In addition, the purchasing managers’ index indicates that export orders have declined, while service exports remain above trend but have come off their December 2022 peak.
Acuite foresees challenges in the domestic growth in FY24 due to the slowdown in global growth, tightening credit conditions after the banking sector turmoil, climate risks, private capex remaining uneven and sluggish, and downsides in urban leveraged consumption due to pass-through of higher borrowing costs.
However, Acuite notes that moderation in inflationary pressures and an increase in public capital expenditure should continue to drive healthy momentum in the domestic economy.
Acuite’s report on the Indian economy indicates a positive outlook despite global economic instability. Domestic demand remains strong, and India is expected to maintain healthy GDP growth, though it is likely to moderate in FY24.
The agency also highlights potential challenges in the coming fiscal year, but the moderation of inflationary pressures and public capital expenditure should keep the momentum of the Indian economy moving forward.