The Asian Development Bank (ADB) and India Ratings and Research have released contrasting forecasts for India’s economic growth in the fiscal year 2024 (FY24). While ADB has lowered its projection to 6.3%, India Ratings has raised it to 6.2%. Here’s a breakdown of their assessments and key factors influencing these predictions:
Monsoon Patterns Impact: ADB cites erratic monsoon patterns as a primary reason for revising India’s growth forecast down by 10 basis points to 6.3% for FY24. These patterns are expected to affect agricultural output.
Positive Outlook for FY25: Despite the downward adjustment for FY24, ADB maintains its growth projection for FY25 at 6.7%. This optimistic outlook is based on expectations of rising private investment and industrial output driving economic growth.
Supporting Factors: India Ratings and Research has increased its FY24 growth estimate for India to 6.2%, up by 30 basis points. They attribute this upward revision to several factors:
Challenges Ahead: India Ratings and Research acknowledges challenges facing the Indian economy, including:
Economic Trends: Despite a strong quarterly GDP growth of 7.8% in Q1 FY24, the expectation is for economic expansion to slow sequentially over the remaining quarters of FY24.
Private Capital Expenditure: There are signs of recovery in private capital expenditure, with new projects emerging in various states and sectors.
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