Economic Growth Forecasts for India: 2023-2025

Various financial institutions have revised India’s growth forecasts. Goldman Sachs increased the 2023 projection to 6.7% but maintained 2024 at 6.2%. Morgan Stanley raised the FY 2024 estimate to 6.9%, while Citi cited investment for a 6.7% forecast. SBI Research and DBS see growth, and IDFC First Bank upgraded its GDP forecast to 6.7%. Bank of Baroda anticipates FY24 growth, citing government support and festive boosts.

Goldman Sachs: Optimistic Outlook with a Slight Tweak

Goldman Sachs has raised India’s growth forecast for the calendar year 2023 by 20 basis points, now standing at an impressive 6.7% year-on-year. However, their optimism is cautious as the 2024 forecast remains unchanged at 6.2%.

Morgan Stanley’s Positive Revisions

Morgan Stanley takes a bullish stance, revising the financial year 2024 growth forecast upwards to 6.9% from the previous 6.4%. While optimism prevails, the forecast for the financial year 2025 remains steady at 6.5%.

Citi’s Confidence in Investment Activity

Citi attributes the boost in the financial year 2024 GDP forecast, now at 6.7% (an increase of 50 basis points), to a notable pick-up in investment activity. This underscores the significance of economic drivers in shaping growth trajectories.

Diverse Views: Axis Capital’s Upside, Nuvama’s Consistency

Axis Capital joins the positive chorus, raising its estimates to 6.7% with identified upside risks. In contrast, Nuvama Institutional Equities maintains a conservative stance, retaining the GDP growth forecast at 6.5%, showcasing the diversity of opinions among financial institutions.

SBI Research and DBS: Aligning Towards Growth

State Bank of India (SBI) Research and DBS both anticipate robust growth. SBI Research has revised its GDP forecast for fiscal 2023-24 to approximately 7%, demonstrating confidence in India’s economic momentum. Meanwhile, DBS now envisions growth in the current financial year at 6.8%, up from the earlier projection of 6.4%.

IDFC First Bank’s Positive Adjustment

IDFC First Bank joins the upward revision trend, boosting its India GDP forecast for the full fiscal year to 6.7% from the previous 6.2%. This adjustment signals a shared optimism among financial institutions regarding India’s economic performance.

Bank of Baroda’s Perspective: Government Support and Festive Boost

Bank of Baroda Economist Jahnavi Prabhakar emphasizes the role of government spending and a delayed festive season in supporting growth. Anticipating a higher growth for FY24, the bank introduces an upward bias of 0.1-0.2%, underlining the multifaceted factors influencing India’s economic trajectory.

Important Questions Related to Exams

Q: What is Goldman Sachs’ revised growth forecast for India in 2023, and how does it compare to the forecast for 2024?

A: Goldman Sachs has increased India’s 2023 growth forecast to 6.7% year-on-year, a 20 basis point hike. However, they maintained the 2024 forecast at 6.2%.

Q: What factors does Citi attribute to the increase in their financial year 2024 GDP forecast for India?

A: Citi attributes the 50 basis point increase in its financial year 2024 GDP forecast (now at 6.7%) to a notable pick-up in investment activity.

Q: How does Morgan Stanley’s outlook for the financial year 2024 differ from its previous projection, and what about the financial year 2025?

A: Morgan Stanley has revised its financial year 2024 growth forecast upward to 6.9% from 6.4%. The forecast for the financial year 2025 remains steady at 6.5%.

Q: What is the stance of Nuvama Institutional Equities regarding India’s GDP growth, and how does it differ from Axis Capital?

A: Nuvama Institutional Equities has retained the GDP growth forecast at 6.5%, while Axis Capital raised its estimates to 6.7% with identified upside risks, showcasing diverse perspectives.

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Piyush Shukla

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