Indian GDP To Register 6.4% Growth In Q3 FY24: BOB

The IMF predicted that the Indian economy will expand by 6.7 per cent in the current fiscal year, marking a 40 basis points upgrade from its earlier projection in October '23

India's Gross Domestic Product (GDP) in the third quarter of the financial year 2023-24 is expected to expand by 6.4 per cent, attributing to subdued growth in the industrial and agricultural sectors, said a report by government-owned mortgage lender Bank of Baroda (BOB) on Friday. “For Q3FY24, the economy is projected to grow at a slower pace by 6.4 per cent against a growth of 7.6 per cent in Q2FY24 led by subdued growth in the agriculture and industry sector. The service sector is expected to lift up growth,” Jahnavi Prabhakar, Economist, said in a report.

Prabhakar stated that economic growth in Q3 FY24, while slightly slower than Q2, varies across sectors, with some experiencing more robust growth than others. The full-year estimate stands at 6.8 per cent. Looking ahead to FY25, growth is projected to hover around a similar level of 6.75-6.8 per cent, Prabhakar added.

The IMF predicted that the Indian economy will expand by 6.7 per cent in the current fiscal year, marking a 40 basis points upgrade from its earlier projection in October '23. For both FY24 and FY25, the economy is anticipated to grow by 6.5 per cent, driven by the 'resilience in domestic demand'.

“On the other hand, the World Bank expects the economy to clock a growth of 6.3 per cent in FY24 and 6.4 per cent in FY25 led by strong domestic demand, growing infrastructure spending along with robust private sector credit growth,” Prabhakar said.

Contrary to these forecasts, according to the NSO advance estimates, the economy is expected to grow by 7.3 per cent in the current fiscal year. The Reserve Bank Of India (RBI) has set the country's growth at 7 per cent in FY24, with growth rates for Q3FY24 and Q4FY24 projected at 6.5 per cent and 6 per cent, respectively. 

For FY25, growth is forecasted at 7 per cent, with downside risks stemming from the escalation of geopolitical tensions and volatility in financial markets, as per Prabhakar's statement. Recently, credit rating agency ICRA stated that India's GDP is likely to expand by 6 per cent in Q3 FY2024, down from 7.6 per cent in Q2 FY2024.