GDP booster shot before June 4: Growth exceeds expectations at 7.8% in Q4, 8.2% in fiscal 2024
India’s gross domestic product (GDP) grew at 7.8 per cent in the last quarter of the FY24 with the Centre now estimating the overall growth rate of FY24 to be 8.2 per cent, MOSPI data showed.
This growth has been driven by expansion in both industry and services sectors.
The government’s statistical office also reported that gross value added (GVA), excluding indirect taxes and subsidies, rose by 6.3% during the same period. The numbers underscore a robust economic performance leading up to the elections.
India’s six-week elections comes to end on June 1, with results expected on June 4. The BJP is widely expected to return to office, although there is uncertainty about whether it will be able to expand its majority as Modi has been predicting. Financial markets are bracing for a possible selloff if the BJP loses support, concerned about a possible shift away from economic reforms.
Teresa John, an economist at Nirmal Bang Institutional Equities, said no matter which party forms the government in June, India’s growth will stay robust. There may not be “any significant change in the broad direction of policy irrespective of political party,” she said.
Stronger growth means the Reserve Bank of India will have reason to keep interest rates unchanged for longer, given inflation is still above its 4% target and the US Federal Reserve has delayed its policy easing. Economists including from Goldman Sachs Group Inc. have pushed back their rate-cut forecasts for India to later this year as the US keeps rates higher for longer.
