India's GDP forecast to climb 6.3% in FY24: FICCI

The industry sector is projected to grow by 5.6 per cent. Agriculture and allied activities are expected to grow at a moderate rate of 2.7 per cent for 2023-24, compared to the 4 per cent growth reported in the previous fiscal. The El Nino effect is cited as affecting the spatial distribution of rainfall this monsoon, impacting the sector, as per the survey.

The survey points to several downside risks to growth, including geopolitical tensions, a slowdown in China, the lagged impact of monetary tightening, and below-normal monsoons. It further suggests a slowdown in GDP growth to 6.1 per cent in the second quarter (Q2) and 6 per cent in Q3 FY24, after a four-quarter high of 7.8 per cent in Q1 FY24.

On the inflation front, the median forecast for CPI-based inflation is set at 5.5 per cent for FY24, with a range of 5.3 per cent to 5.7 per cent. Despite the potential peak of the CPI inflation rate, the survey indicates that upside risks to prices, particularly cereals, remain. The rate is expected to stay above the Reserve Bank of India's targeted level for the remainder of the fiscal.

Regarding the RBI's monetary policy, economists predict a cut in the repo rate only by the end of Q1 or Q2 in FY25.

On investments, the survey notes that the government's focus on capital expenditure has encouraged private investments, providing a boost to growth momentum. However, a complete recovery in investments is expected to take more time and will likely be driven by a rise in both domestic and external consumption activity.

Fibre2Fashion News Desk (DP)