India Ratings and Research (Ind-Ra) has revised its GDP growth estimate for the current fiscal year upward to 6.7% from the earlier 6.2%, citing a resilient economy, sustained government capital expenditure, and the potential for a new private corporate capital expenditure cycle. The agency acknowledges risks such as weak global growth, trade uncertainties, and volatile geopolitical situations that may limit India’s GDP growth.
Positive Drivers: The upgrade is attributed to the resilience of the Indian economy, sustained government capex, a deleveraged corporate/banking sector balance sheet, and the potential for a new private corporate capex cycle. Business and software services exports, along with remittances from abroad, contribute to enduring momentum.
Inflation Outlook: Ind-Ra expects average retail and wholesale inflation to be 5.3% and 0.6%, respectively, in FY24.
What factors contributed to Ind-Ra’s upward revision of India’s GDP growth forecast for FY’24?
According to Ind-Ra, what is the expected impact of a 1% increase in real wages on the growth of real private final consumption expenditure (PFCE) and overall GDP growth?
Please provide your answers in the comment section!!
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