The Reserve Bank on Wednesday retained the GDP growth forecast at 9.5 per cent for the current fiscal but cautioned that the economic recovery is not yet strong enough to be self-sustaining and durable.
However, the SBI report said it will take almost seven-quarters from Q4 FY21 to reach the pre-pandemic level in nominal terms and there will be a permanent output loss of around 9 per cent of GDP.
Fitch Ratings has revised India's GDP growth estimate to 12.8 per cent for the fiscal year beginning April 1 from its previous estimate of 11 per cent, saying its recovery from the depths of the lockdown-induced recession has been swifter than expected. In its latest Global Economic Outlook (GEO), Fitch said revision is on the back of "a stronger carryover effect, a looser fiscal stance and better virus containment." "India's second half of 2020 rebound also took GDP back above its pre-pandemic level and we have revised up our 2021-2022 forecast to 12.8 per cent from 11.0 per cent," it said. "Nevertheless, we expect the level of Indian GDP to remain well below our pre-pandemic forecast trajectory."
Deloitte India on Thursday projected India's economy to grow 6.7-6.9 per cent in the current fiscal amid buoyant demand and policy reforms. Indian economy grew 7.8 per cent in the April-June quarter of current fiscal.
Moody's Investors Service on Thursday slashed India's economic growth projection to 8.8 per cent for 2022 from 9.1 per cent earlier, citing high inflation. In its update to Global Macro Outlook 2022-23, Moody's said high-frequency data suggests that the growth momentum from December quarter 2021 carried through into the first four months this year. However, the rise in crude oil, food and fertilizer prices will weigh on household finances and spending in the months ahead.
Uncertainties stemming from the West Asia crisis and its potential impact on inflation and economic growth were key factors in the Reserve Bank of India's Monetary Policy Committee (MPC) decision to maintain the status quo on interest rates, according to the recently released MPC meeting minutes.
India's growth outlook has weakened sharply this year, with a crunch that started with the non-banking finance institutions spreading to retail businesses, car-makers, home sales and heavy industries.
Chief economist at State Bank of India has revised downward the full-year growth forecast to a low 6.8 per cent from 7.5 per cent earlier for FY2023, citing "the way below GDP numbers for the first quarter". The National Statistical Office on Wednesday released the Q1 growth numbers which showed a consensus growth of 13.5 per cent, pulled down by the poor show of the manufacturing sector, which reported a paltry 4.8 per cent expansion in the first three months of FY23, negating the robust show by the services sector. Consensus forecast was 15-16.7 per cent of which the RBI made the highest forecast of 16.7 per cent.
Fitch Ratings on Thursday raised its forecast for India's economic growth to 6.3 per cent for current fiscal year 2023-24 from 6 per cent it had predicted previously. This is primarily because of a stronger outturn in the first quarter and near-term momentum. The growth forecast compares with 7.2 per cent GDP expansion in FY23. In the previous fiscal year (FY22), the economy had grown 9.1 per cent.
Deloitte India on Friday said it estimates India's GDP growth at 6.6 per cent in the current fiscal helped by consumption expenditure, exports rebound and capital flows. In its India's economic outlook report, Deloitte said the rapid growth of the middle-income class has led to rising purchasing power and even created demand for premium luxury products and services. With the expectation that the number of middle-to-high-income segments will be one in two households by 2030/31, up from one in four currently, we believe this trend will likely become further amplified, driving overall private consumer expenditure growth, it said.
Wall Street brokerage Goldman Sachs has lowered its estimate for India's economic growth to 11.1 per cent in fiscal year to March 31, 2022, as a number of cities and states announced lockdowns of varying intensities to check spread of coronavirus infections. India is suffering the world's worst outbreak of COVID-19 cases, with deaths crossing 2.22 lakh and new cases above 3.5 lakh daily. This has led to demand for imposition of nationwide strict lockdowns to stem the spread of the virus - a move that the Modi government has so far avoided after the economic devastation last year from a similar strategy.
Prospects of a stable government at the Centre have prompted at least six economic forecasters to raise their growth estimates for the current fiscal, citing lower-than-expected political risk after the recent general elections.
India emerged reasonably well from 2025. But now, the oil shock and war-related supply disruptions have again driven funds out of India and significantly weakened the rupee, points out Ajay Chhibber.
S&P Global Ratings on Tuesday raised India's growth projection for the current fiscal to -7.7 per cent from -9 per cent estimated earlier on rising demand and falling COVID infection rates. "Rising demand and falling infection rates have tempered our expectation of COVID's hit on the Indian economy. S&P Global Ratings has revised real GDP growth to negative 7.7 per cent for the year ending March 2021, from negative 9 per cent previously," S&P said in a statement. The US-based rating agency said its revision in growth forecast reflects a faster-than-expected recovery in the quarter through September. For the next fiscal, it projected India's growth to rebound to 10 per cent.
Moody's on Monday slashed India's growth forecast for 2020 to 5.4 per cent from 6.6 per cent projected earlier, on slower than expected economic recovery. In its update on Global Macro Outlook, Moody's Investors Service said India's economy has decelerated rapidly over the last 2 years and economic recovery is likely to be 'shallow'.
However, the World Bank has projected India's GDP growth rate at 7.5 per cent for the next three financial years, including the current one.
FY17 GDP growth faces cash crunch heat
India's economy is likely to grow by 6.5 per cent in the current and the next financial year, an EY report said, attributing lower than anticipated expansion in the September quarter to fall in private consumption expenditure and gross fixed capital formation. Real GDP growth eased to a seven-quarter low of 5.4 per cent in July-September -- the second quarter of the current 2024-25 fiscal year.
India's economy continues to be robust, but downside risks such as rising crude oil prices, adverse weather conditions, and the global banking crisis outweigh the upside potential in gross domestic product (GDP) growth in the current financial year (FY24), the finance ministry said on Tuesday in its Monthly Economic Review for March. "We reiterate that downside risks to our official forecast of 6.5 per cent for real GDP growth in FY24 dominate upside risks," the review said. "Opec's surprise production cut has seen oil prices rise in April, off their lows of low-seventies per barrel in March.
Weaker demand for Indian exports and higher financing costs will lead to a deceleration in India's gross domestic product (GDP) growth rate to 7.9 per cent in 2008, the International Monetary Fund has said.The IMF's growth projections for India are in line with other estimates, including that of the Asian Development Bank, which pegged the 2008-09 growth at 8 per cent.
Moody's Investors Service on Thursday upped India growth forecast to (-) 10.6 per cent for the current fiscal, from its earlier estimate of (-) 11.5 per cent, saying the latest stimulus prioritises manufacturing and job creation, and focuses on longer-term growth. Last week the government had announced a new fiscal package amounting to Rs 2.7 lakh crore. Moody's said the latest measures aim to increase the competitiveness of India's manufacturing sector and create jobs, while supporting infrastructure investment, credit availability and stressed sectors.
Most members of the Reserve Bank of India's Monetary Policy Committee (MPC) expressed concerns about inflation becoming generalised and highlighted uncertainties surrounding both inflation and growth prospects due to the West Asia conflict, according to the recently released minutes.
'We expect a pick-up in the second half of the current fiscal. But before that, data is likely to show a further slowdown. The second quarter print is likely to be worse than the first quarter,' said a senior official.
Indian economy grew by 7.8 per cent in April-June -- the highest in five quarters -- before the disruptive US tariffs were imposed.
Economic growth has slipped to a six-year low of 5 per cent for the June quarter and is expected to turn in lower than that in the September quarter. Lack of consumption is seen as one of the key factors pulling down growth.
The consumer price index (CPI)-based inflation hitting an all-time low in October would encourage the six-member monetary policy committee (MPC) of the Reserve Bank of India (RBI) to cut the policy repo rate in its upcoming December 3-5 meeting. However, the July-September GDP growth, expected to be above 7 per cent, may act as a deterrent.
Fitch Ratings on Thursday raised its forecast for India's economic growth to 7 per cent for the next fiscal year starting April 1 on the back of strong domestic demand and sustained level of business and consumer confidence. With a stronger-than-expected 8.4 per cent growth in gross domestic product (GDP) during the third quarter (October-December) of the current fiscal year, Fitch saw the Indian economy expanding 7.8 per cent in 2023-24 financial year (April 2023 to March 2024), marginally higher than the government's estimate of 7.6 per cent.
Moody's Investors Service on Friday projected India's growth at zero per cent for the current fiscal and said the negative outlook on sovereign rating reflects increasing risks that GDP growth will remain significantly lower than in the past. The outlook also partly shows weaker policy effectiveness to address economic and institutional issues, it noted in the update to its November 2019 rating forecast.
The country's GDP is likely to grow at 1.3 per cent in the fourth quarter of 2020-21 and may see a contraction of around 7.3 per cent for the full financial year, according to an SBI research report 'Ecowrap'. The e-National Statistical Office (NSO) will release the GDP estimates for the March 2021 quarter and provisional annual estimates for the year 2020-21 on May 31. "Based on our 'nowcasting model', the forecasted GDP growth for Q4 would be around 1.3 per cent (with downward bias) as against NSO (National Statistical Office) projection of a negative (-)1 per cent," the research report said.
Optimism comes at a time when several agencies trimmed forecast to as low as 5.5% citing inaction policy paralysis as major growth impediment
The Reserve Bank on Friday retained the GDP forecast for the current financial year at 9.5 per cent and flagged global semiconductor shortages, elevated commodity prices and potential global financial market volatility as downside risks to economic growth. In his address after the three-day meeting of the rate-setting panel, RBI Governor Shaktikanta Das said recovery in aggregate demand gathered pace in August-September, and it is reflected in high-frequency indicators, like railway freight traffic; port cargo; cement production; electricity demand; e-way bills; GST and toll collections. "The ebbing of infections, together with improving consumer confidence, has been supporting private consumption," he said, and added the pent-up demand and the festival season should give further fillip to urban demand in the second half of the financial year.
Projecting a much better forecast than those made by the government and Reserve Bank of India, economic think tank NCAER on Tuesday said the Indian economy could grow by up to 8.9 per cent during 2008-09, despite a global slowdown.
Indian stock market indices closed on a mixed note, with the Sensex gaining 374 points driven by buying in Reliance Industries and ICICI Bank, while the Nifty remained flat. This divergence is attributed to a new Closing Auction Session (CAS) mechanism introduced by stock exchanges, impacting market liquidity and price discovery.
Describing the "lower agriculture output" as the "immediate challenge", Nomura said it could be a drag on GDP in the next quarter and on rural consumption. "But we expect urban consumption to rebound due to better job prospects," it said.
* Repo rate reduced by 25bps to 5.25 pc; * 4th rate cut, totalling 125 bps, since February 2025; * MPC also decided to continue with neutral stance; * GDP growth forecast for FY26 raised to 7.3 pc from 6.8 pc;
IMF projected India's economic growth at 4.25% in 2013-14.
The EIU said in a report on Wednesday forecast that the real GDP grew by 1.6 per cent quarter-on-quarter in India, but noted that this uptick was largely owing to base effect.
Think tank NCAER on Friday said the country's growth rate is likely to be 5.9 per cent, a tad lower than its previous forecast due to slowdown in key manufacturing and services sectors.
'India has benefited from lower oil prices and remains the fastest-growing large economy in the world.'
The Indian economy will grow at around 6.5 per cent in the current fiscal, notwithstanding high crude oil prices and increased uncertainty due climate changes, NITI Aayog member Arvind Virmani said on Thursday. Virmani also asserted that the gross household savings ratio in India has consistently gone up. In an interview with PTI, he said: "My growth projection (of India's GDP growth) is 6.5 per cent plus minus 0.5 per cent... because my experience is that the fluctuations in global GDP more or less has balanced out for us, assuming normal changes."
