The slowdown in financial growth in the second half of 2023-24 projected by the National Statistical Office (NSO) is predicted to persist in the approaching monetary yr, score agency Crisil mentioned on Monday. Real GDP grew 7.7% in the primary half of the yr, and the NSO anticipates annual growth to hit 7.3%.
“The first advance estimates bake in a slowdown in the second half relative to the first half of this fiscal. The latter half slowdown has been driven by weaker private consumption, especially rural demand, and the bite of rising interest rates. We expect the slowdown to continue next fiscal,” Crisil economists mentioned.
The key causes cited for additional softening in financial momentum embrace weaker international growth — anticipated to ease to 2.8% in 2024 from 3.3% in 2023 — and excessive rates of interest whose transmission continues to be taking part in out, hurting home demand.
“Services growth has begun slowing. Slowing consumption spending will further drag growth next fiscal… As government moves a step further to reducing fiscal deficit in upcoming budget; it may need to reduce capital expenditure next year. This will take some steam off robust investment growth,” the Crisil group famous.
