“India Ratings Upgrades FY24 GDP Growth Forecast to 6.7%”

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“India Ratings Upgrades FY24 GDP Growth Forecast to 6.7%”
  • By Shreya Shrivastava
  • 08th January, 2024
  • Banking
India Ratings and Research (Ind-Ra) has upwardly revised India’s Gross Domestic Product (GDP) growth projection for FY24 from the previous 6.2 percent to 6.7 percent. This shift is attributed to various factors, notably the resilience showcased by the Indian economy, which exhibited a growth of 7.6 percent in the second quarter of FY24.

Ind-Ra highlights several factors contributing to this growth surge, including continuous government capital expenditure, reduced debt burdens on corporate/banking balance sheets, the potential initiation of a new private corporate capital expenditure phase, and the sustained momentum in both business and software services exports. Additionally, despite global challenges, it acknowledges the consistent inflow of remittances from abroad as a supporting factor. Nevertheless, it acknowledges looming risks to global growth.

The World Trade Organization (WTO) has projected a slowdown in the world merchandise trade volume, estimating a meager 0.8 percent growth in 2023, contrasting with the anticipated 1.7 percent. However, it forecasts a rebound to 3.3 percent growth in 2024.

On the global front, the International Monetary Fund (IMF) foresees a deceleration in worldwide growth, expecting a dip to 2.9 percent in 2024 from the 3 percent recorded in 2023. This projection falls beneath the pre-pandemic average growth rate of 3.8 percent observed between 2000 and 2019. While the IMF notes a slight decrease of 10 basis points (bps) to 4 percent in emerging markets and developing economies in 2023 (from 4.1 percent in 2022), it underscores a more pronounced decline of 110 bps to 1.5 percent (from 2.6 percent) in advanced economies during the same period.

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