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India's economic activity growth slows in November 2023: ICRA

19 Dec '23

2 min read

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India's economic activity growth slowed to 9.6 per cent in November 2023 from 13 per cent in October, influenced by fewer working days due to the festive calendar.
The October-November period showed stronger growth at 11.3 per cent, surpassing the 9.5 per cent in Q2 FY24.
ICRA revised the FY24 GDP growth forecast to 6.5 per cent, below MPC's 7 per cent.

India’s year-on-year (YoY) growth in economic activity eased to 9.6 per cent in November 2023 from 13 per cent in October 2023, according to the ICRA Business Activity Monitor. The dip is largely attributed to fewer working days in November due to the festive calendar shift compared to 2022. This variation complicates YoY comparisons for October and November, thus necessitating an average YoY growth assessment for these months.

The combined October-November 2023 period saw a YoY expansion of 11.3 per cent, exceeding the 9.5 per cent growth observed in the second quarter (Q2) of financial year 2024 FY24, indicating sustained growth momentum.

Despite the slowdown in November, the ICRA Business Activity Monitor recorded a milder month-on-month (MoM) dip of 1 per cent, compared to a 3.0 per cent decrease in November 2021. This performance suggests a resilience in economic activity, even amidst a larger number of holidays. The growth momentum remained robust in the first two months of the ongoing quarter, as eight of the 14 available indicators showed an uptick in YoY performance in October-November of FY24, supported by healthy demand for goods during the festive season.

In light of these trends, and coupled with sustained deflation in global commodity prices, as indicated by the Bloomberg Commodity Index trending 10.2 per cent lower than the year-ago levels in Q3 FY24, ICRA has revised its forecast for the FY24 GDP growth to 6.5 per cent from 6.2 per cent. This revision, however, still trails behind the Monetary Policy Committee’s (MPC) revised projection of 7 per cent for the fiscal.

Fibre2Fashion News Desk (DP)

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