India recorded a GDP expansion of 6.1 per cent in the March quarter. The growth moved up to 7.8 per cent in the June quarter and was 7.6 per cent in the September quarter. For the first six months of this fiscal, the growth was 7.7 per cent. Yet, there are risks to the economic growth and stability in 2024.
The nodal body of statistics in the country, the Ministry of Statistics and Programme Implementation has been trying to develop a database of high-frequency socio-economic indicators which cannot be compiled using administrative data.
The Indian finance ministry predicts a 6.5% growth rate in FY24, with robust economic activity in the third quarter expected to continue through the March quarter. The ministry predicts continued growth in manufacturing, positive sentiments in the services sector, sustained rise in consumption expenditure, and improved current account balance. Retail inflation is expected to moderate despite temporary disruptions caused by volatile food prices.
Fitch Ratings predicts a significant boost in the profitability of Indian corporates in FY25, driven by robust economic growth despite challenges in overseas markets. With a projected GDP growth of 6.5% in FY25, India is poised to be among the fastest-growing sovereigns, fueling demand across sectors. Fitch anticipates a 290 basis points improvement in profitability compared to FY23, providing corporates with rating headroom.
Mumbai is the only city beyond the affordability threshold of 50%, a level exceeding which banks rarely underwrite a mortgage. The most expensive residential market of the country, has however seen an improvement of 2% in its affordability index measured at 51% in 2023 from 53% in 2022. Ahmedabad, Kolkata, and Pune have emerged as the most affordable residential markets in 2023.
The evolving economy must organically create adequate jobs to employ new entrants into the burgeoning labour force gainfully. After the success stories of workforce absorbed by the software sector, retail, ecommerce and logistics, what comes next, with AI and mega factories queering the future job pitch? And, more existentially, will India become rich before it gets old?
The exuberance of Indian stock markets is well-timed when it comes to confidence, the all-important ingredient of economic growth. In the last few years, the rapid growth of the Indian startup sector spread optimism among the wider business community. During 2020-22, when the economy was roiled by Covid and consequent lockdowns, the rise in the number of unicorns at a fast clip did much to spread cheer - and some jealousy - in the business community.
India's current account deficit (CAD), representing the excess of imports over exports, contracted to 1% of the gross domestic product (GDP) in the September 2023 quarter. The deficit stood at $8.3 billion, down from $9.2 billion in the June 2023 quarter and $30.9 billion (3.8% of GDP) a year ago. Services exports grew by 4.2% year-on-year, driven by increased exports of software, business, and travel services.
India's current account deficit (CAD) for the July-September quarter of fiscal 2023-24 narrowed to $8.3 billion, constituting 1% of the GDP. This is a decline from the $9.2 billion or 1.1% of GDP reported in the preceding quarter. The improvement is attributed to a reduced merchandise trade deficit, which contracted to $61.0 billion from $78.3 billion in the same quarter the previous year.
Through its G20 presidency, India was able to get the most influential, powerful, and consequential countries of the world to gather around the table and discuss, agree on some of the most pressing issues concerning the world today.
Fitch said that with strong domestic demand growth, it is expected that India will be among the world's fastest-growing countries, with resilient GDP growth of 6.5 per cent during the fiscal 2024-25.
While the Reserve Bank of India's rate-setting panel opted to maintain unchanged rates in its December meeting, Governor Shaktikanta Das expressed concerns about inflation, acknowledging its retreat from highs but noting its persistent volatility. External MPC member Jayanth Varma suggested that a stance might not be necessary, but if adopted, it should be neutral.
2024 will be a tale of two stories with the first stage in Q12024; the world witnessing a global slowdown and moderation of profit growth, ballooning of global debt and falling consumption due to high-interest rates.
"In growth terms, agriculture and allied sector has registered an average annual growth of 4 per cent during last five years. As far as global experience is concerned, share of agriculture in the world's GDP has also declined over the decades and stands at about 4 per cent in recent years," Agriculture Minister Arjun Munda said.
Earlier this month, the RBI had revised upwards its GDP estimate to 7 per cent from 6.5 per cent, calling the revised number a "conservative" one. The rating agency did not specify reasons for the lower growth estimate made in its business activity monitor.
India's fiscal deficit in the first seven months of the financial year ending on March 31, 2024 was Rs 8.04 lakh crore ($96.86 billion), or 45% of the estimate for the whole year, according to data released by the government last month.
Indian economy: India showcases remarkable resilience, surging as the world's fastest-growing major economy, overtaking the UK to secure fifth place. Bolstered by a robust rebound from COVID-19 shocks, its GDP soared by 7.8%, hitting approximately Rs 40.37 trillion (USD 484.94 billion) in the initial quarter of fiscal year 2023. This growth heralds India's resurgence from the pandemic-induced downturn, shaping a promising economic trajectory ahead.
Exports can be transformational for the nation as it aims to transition from developing country to a developed economy, Sahai stated.
According to official statistics, Uttar Pradesh was third in GDP share. In a creative shared on the social media platform X, Uttar Pradesh is depicted as securing the second position in terms of GDP share. As per this, while Maharashtra leads with a GDP share of 15.7 percent of the country's total GDP, Uttar Pradesh follows closely with a GDP share of 9.2 percent.
India's economy is rapidly recovering from the impact of the Covid-19 pandemic, set to achieve nearly 7% growth in the fiscal year ending March. Fueled by robust domestic demand, this growth contrasts with a global economic slowdown and geopolitical instability. A recent quarterly GDP expansion of 7.6% from July to September follows a 7.8% growth in the previous quarter, resulting in robust first-half growth of 7.7%.
Policymakers from fully half of the Group of 10 jurisdictions of most-traded currencies are scheduled to meet in the coming days, and interest rates for 60% of the world economy will be set in a whirlwind 60-hour window. Most notable will be the US Federal Reserve on Wednesday, followed on Thursday by central banks including those of the euro zone and the UK.
Addressing a programme at the Calcutta Chamber of Commerce, he said there is a need to counter global narratives built on "absurd and irrelevant" data points, and India's second-largest rating agency CareEdge will soon start publishing sovereign ratings.
S&P Global Ratings forecasts India's GDP to reach 7% by 2026, surpassing China's expected 4.6% growth. The report, titled 'China Slows India Grows,' envisions a shift in Asia-Pacific's growth engine from China to South and Southeast Asia. S&P projects China's GDP to slow to 4.6% in 2024, India's to expand at 6.4% in the current and next fiscal years, and rise to 7% by 2026.
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