FILE PHOTO: FILE PHOTO: A employee operates a machine inside a small scale manufacturing unit in Mumbai, India, February 1, 2023. REUTERS/Niharika Kulkarni/File Photo/File Photo
| Photo Credit: NIHARIKA KULKARNI
The Indian economy is predicted to grow by 7% in the second quarter, surpassing the central financial institution’s estimate of a 6.5% uptick, ranking company ICRA stated on Tuesday, citing improved industrial efficiency regardless of a weak monsoon hitting the farm sector.
India’s actual GDP (Gross Domestic Product) and Gross Value Added (GVA) had grown 7.8% in the April to June 2023 quarter. ICRA expects the GVA development to ease to 6.8% in the July to September quarter, with the companies sector’s GVA anticipated to rise 8.2%, from 10.3% in Q1, and business reflecting a 6.6% rise. Farm sector GVA development is predicted to slow to 1% from 3.5% in the primary quarter.
“A normalising base and an erratic monsoon are expected to result in a sequential moderation in the GDP growth to 7.0% in Q2 from 7.8% in Q1,” ICRA chief economist Aditi Nayar stated. “Regardless, we anticipate that the GDP expansion in this quarter will exceed the Monetary Policy Committee’s (MPC’s) October 2023 projection of 6.5%,” she added.
“Looking ahead, uneven rainfall, narrowing differentials with year-ago commodity prices, the possible slowdown in momentum of Government capex as we approach the Parliamentary Elections, weak external demand and the cumulative impact of monetary tightening are likely to translate into lower GDP growth in H2 FY2024. As a result, we maintain our 2023-24 GDP growth estimate at 6.0%, lower than the MPC’s projection of 6.5% for the fiscal.”
