Further hike will depend on the RBI's assessment
India appears poised to sustain its growth in a more durable way than before with the economy carrying the momentum from FY23 into the current fiscal year, the Annual Economic Review for 2022-23 released by the finance ministry on Thursday said. However, the report cautioned that escalation of geopolitical stress, enhanced volatility in global financial systems, sharp price correction in global stock markets, a high magnitude of El-Nino impact, and modest trade activity and FDI inflows, are factors that could constrain the pace of growth. "Should these developments deepen and dampen growth in the subsequent quarters, the external sector may challenge India's growth outlook for FY24," the finance ministry said.
The Reserve Bank on Thursday marginally revised upwards the economic growth projection for the current fiscal to 6.5 per cent, from its earlier estimate of 6.4 per cent. Unveiling the first bi-monthly monetary policy of 2023-24 fiscal, RBI Governor Shaktikanta Das said the GDP growth in the first quarter of 2023-24 is expected at 7.8 per cent.
Rating agency Icra has revised down its GDP growth estimate to 5.7 per cent, citing absence of concrete improvements in the investment sentiment, weaker monsoon and a likely rise in inflation, which limit RBI's room to spur the growth by cutting rates.
India's service sector activity accelerated slightly in April largely driven by a quicker increase in new order inflows, which also underpinned a faster expansion in employment, a monthly survey said on Tuesday. The seasonally adjusted HSBC India Services PMI Business Activity Index reached 58.7 in April, up from 58.5 in March, indicating a sharp and stronger expansion in service sector output.
It is also likely to assume a deflator of around 4 per cent. That could take the nominal GDP outlook for FY21 to around 10 per cent. It is this nominal GDP forecast on the basis of which the finance ministry is calculating key Budget targets like the fiscal deficit as a percentage of GDP and tax revenue growth for the coming year.
RBI expects the growth in the next fiscal to strengthen gradually, notwithstanding the significant headwinds.
India is expected to log about 4.8 per cent economic growth in 2002-03, making it one of the world's fastest expanding economies, economists said on Friday.\n\n
The sweeping tariffs proposed across sectors by US President Donald Trump are scheduled to be imposed starting April 2, with most analysts worried about their impact on companies, and in turn the financial markets. Recently, the US administration signaled that it will impose sectoral tariffs on energy, pharmaceuticals, semiconductors, agriculture, copper, and lumber.
Elaborating on its not-so-pleasing outlook on the economy, Crisil said private consumption demand, which has been the bulwark of growth for the last few decades, grew by a pale 3.1 per cent in the first quarter as against 7.2 per cent growth in the preceding quarter.
China's GDP grew by 4.9 per cent in the third quarter, down from 7.9 per cent in the second, confirming the slowdown of the world's second-largest economy which was under pressure from the crisis-hit property sector, curbs on energy and tardy recovery from the Covid-19 pandemic.
International Monetary Fund has cut its 2003 global growth forecast to 3.2 per cent from 3.7 per cent due to the Iraq war and stock market declines, and is particularly worried about weak German growth.
It has also reduced its year-end target for the BSE benchmark Sensex by 15 per cent to 18,850.
'India has the potential to grow at more than 7%, with the monetary policy providing a supportive hand.'
From the 30-share pack, Adani Port, Bharti Airtel, Asian Paints, IndusInd Bank, Bajaj Finserv, Reliance Industries, Infosys, UltraTech Cement, HDFC Bank, HCL Technologies and ICICI Bank were among the laggards. Tata Motors, Axis Bank, Maruti, Larsen & Toubro, ITC and Tata Steel were among the gainers.
The Reserve Bank of India's (RBI) Monetary Policy Committee's (MPC) decision to cut the repo rate by 50 basis points (bps) to 5.5% was contrary to the expectations of many economists. Firstly, most of the economists expected the MPC to cut the repo rate by 25 bps citing the weakening of inflation, prospects of economic growth, geopolitical uncertainty and comfortable system liquidity.
'How low GDP would have been, we don't know.' 'It raises serious questions because so many indicators are pointing to such a sharp decline and GDP estimates are still showing 4 per cent growth.'
Domestic and external environment still remain "challenging".
Global trends, macroeconomic data, and the outcome of the US Fed policy meeting are the major factors that will drive the movement in the domestic equity markets this week, analysts said. "In the upcoming data-centric week, the focus will be on crucial releases, including inflation data from India and the US. "Indian inflation is expected to rise, while US inflation will remain steady.
"India's GDP growth rate is about 6.5 per cent this year and our forecast is that the GDP would grow by 8 per cent in FY 11," HSBC India's CEO, Stuart Arthur Davis, told reporters in Mumbai on Monday.
Mixed views were expressed by top economists on the Reserve Bank of India's (RBI) Monetary Policy Committee's (MPC) decision to hold the repo rate at 5.5% and maintain a neutral stance. While some say the decision was as expected and one more rate reduction is expected this fiscal, there is also a view that rate cut by MPC was warranted given the evolving global situation.
Citing a weak manufacturing sector coupled with the steep margin compression, SBI Research has pencilled in the country's GDP growth for the second quarter at 5.8 per cent, down 30 basis points from average estimates. The government will release the official numbers on November 30. In a report on Monday, SBI Research headed by Soumya Kanti Ghosh said corporate results, operating profit of companies, excluding banking and financial sector, degrew by 14 per cent in Q2FY23 as against 35 per cent growth in Q2FY22, though the top line continued to grow at a healthier pace.
The finance ministry will have to rely on the weapons in its arsenal, since monetary policy is not providing the support.
The chief statistician feels there should be a rebound after companies integrate and adopt the GST system
The previous high GDP growth of 8.1 per cent was recorded in April-June quarter of 2016-17.
India needs sustained GDP growth of 9-10 percent - Jaitley
If El Nino condition affects the monsoons, as is being forecast by foreign agencies, it can slow down the economy to 5.2 per cent next fiscal from a projected 6 per cent.
Indian economy grew 7.9 per cent in the March quarter.
Chief Economic Adviser K V Subramanian on Wednesday said India is expected to hit a growth rate of 6.5-7 per cent in 2022-23 and accelerate further to 8 per cent in the subsequent years on the back of reforms undertaken by the government. He also said the government is expected to meet the fiscal deficit target of 6.8 per cent in the current fiscal despite pressure on revenue collections.
Moody's Investors Service on Wednesday raised India's economic growth estimate for 2023 to 5.5 per cent from 4.8 per cent pegged earlier, on the back of a sharp increase in capital expenditure in the Budget and a resilient economic momentum. It however revised downwards India's growth estimate for 2022 to 6.8 per cent from 7 per cent pegged in November last year. In its February update to Global Macro Outlook 2023-24, Moody's raised the baseline 2023 real growth projections "meaningfully" for several G20 economies, including the US, Canada, the Euro area, India, Russia, Mexico, and Turkiye, accounting for a stronger end to 2022.
The S&P BSE Sensex lost 285 points to end at 25,519.
The repo rate, at which the central bank lends to the system, will come down to 5.75 per cent after the cut.
Indian economy is in a sweet spot, with a mix of solid growth and moderating inflation, Moody's Ratings said, forecasting a 7.2 per cent GDP growth in the 2024 calendar year and 6.6 per cent in the next. In its Global Macro Outlook 2025-26, the rating agency said the global economy has shown remarkable resilience in bouncing back from supply chain disruptions during the pandemic, an energy and food crisis after the Russia-Ukraine war began, high inflation and consequent monetary policy tightening.
Growth in the third quarter (October-December) is expected to be the weakest in years, with spending hit due to unavailability of enough replacement currency.
Indian stock markets have experienced some ups and downs in the first half of 2025. However, both the Nifty 50 and Sensex saw steady gains, supported by a healthy economy and better corporate earnings. In this article, we will look at the detailed performance of these key indices and explore the sectors that drove the market rally.
Credit Suisse in a research note said that 'we have cut our 2013/14 year average GDP growth forecast to 6 per cent from 6.5 per cent, while also lowering our 2014/15 projection by half percentage points to 7 per cent'.
The country's gross domestic product (GDP) is likely to grow at 5.8 per cent in the third quarter of fiscal 2022, according to an SBI's research report- Ecowrap. The country's economy expanded by 8.4 per cent in the second quarter of 2021-22, to cross pre-pandemic levels. However, the GDP growth in July-September period was slower than the 20.1 per cent expansion in the previous quarter.
In December, govt had lowered its growth forecast for 2015-16 to 7-7.5%
India's services sector growth touched a four-month high in December, supported by new business inflows on strong demand conditions and easing inflationary pressures, a monthly survey said on Monday. The seasonally adjusted HSBC India Services Business Activity Index, rose from 58.4 in November to 59.3 in December, highlighting the strongest rate of expansion in four months.
Corporate India's net profit as a percentage of gross domestic product (GDP) dipped in the 2022-23 financial year (FY23) -- after rebounding sharply in FY22 -- amid a decline in global commodity prices. Top 500 companies' combined net profit stood at 4.1 per cent of the GDP for FY23, down from 4.3 per cent in the previous financial year when it had gone up from just 3.5 per cent in FY21. "The year-on-year (YoY) decline was led by global commodities, which contributed adversely to the ratio, while the financial sector contributed positively.
