Many analysts have increased their GDP growth projections for FY24 in light of the 7.6% GDP growth in Q2FY24, which was stronger than anticipated and driven by a substantial increase in manufacturing activity and investments.
Growth estimates for the current fiscal year have been revised upward by as many as ten experts, ranging from 20 to 80 basis points (bps). See graphic for Nomura’s sharp 80 bps increase in estimate. “We are raising our FY24 GDP growth projection to 6.7% y-o-y from 5.9% previously due to the robust Q3 (in this case, July-September),” Nomura stated in a research.
The government has maintained its 6.5% growth prediction, while economists’ projections are higher. Following the announcement of Thursday’s GDP numbers, Chief Economic Adviser V. Anantha Nageswaran hinted that the economy might be performing better than the present official estimates suggested.
Manufacturing rose 13.9% in Q2FY24, the fastest rate in nine quarters, according to GDP figures. Still, this was a low starting point. Manufacturing had decreased (-)3.8% in Q2 of FY23.
The GDP proportion of investments, as measured by gross fixed capital formation (GFCF), increased from 34.7% in Q1 FY24 to 35.3% in Q2 FY24. A share of 35.3% is the largest in 47 quarters, even though it is comparable to Q4 FY23.
Despite the 7.7% GDP growth in the first half of the year, a lower H2 will hurt the full-year growth and might cause it to fall well below 7%. rise will be negatively impacted by a meek increase in private consumption and a feeble rise in agriculture.
