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GDP growth estimated at 6.3 per cent for 2023-24: FICCI Economic Outlook Survey

Oct 16, 2023

  • CPI based inflation projected at 5.5 per cent for 2023-24


  • India continues to be a bright spot globally but needs to be watchful about inflation and geo-political developments


NEW DELHI, 16 October 2023: The latest round of FICCI’s Economic Outlook Survey puts forth an annual median GDP growth forecast for the year 2023-24 at 6.3 per cent - with a minimum and maximum growth estimate of 6.0 per cent and 6.6 per cent respectively.

The median growth forecast for agriculture and allied activities has been put at 2.7 per cent for 2023-24. This marks a moderation vis-à-vis growth of about 4.0 per cent reported in the year 2022-23. The El Nino effect has had an impact on the spatial distribution of rainfall this monsoon season. Industry and services sector, on the other hand, are anticipated to grow by 5.6 per cent and 7.3 per cent respectively in the current fiscal year.

The present round of FICCI’s Economic Outlook Survey was conducted in the month of September 2023 and drew responses from leading economists representing industry, banking and financial services sector. The economists were requested to share their forecast for key macro-economic variables for the year 2023-24 and for Q2 (July-September) FY24 and Q3 (October-December) FY24.

Persisting headwinds on account of geopolitical stress, slowing growth in China, lagged impact of monetary tightening and below normal monsoons pose as downside risks to growth. According to the survey results, median GDP growth is estimated to slowdown to 6.1 per cent and 6.0 per cent in Q2 2023-24 and Q3 2023-24 respectively – after posting a four-quarter high growth of 7.8 per cent in Q1 2023-24.

Further, the median forecast for CPI based inflation has been put at 5.5 per cent for 2023-24, with a minimum and maximum range of 5.3 per cent and 5.7 per cent respectively.

The survey participants opined that the course of inflation remains uncertain. The CPI inflation rate may have peaked, but upside risks to prices remain on fore. Prices of cereals have remained sticky. The acreage coverage of pulses and oilseeds under kharif crops has reported a contraction (as of September 30, 2023). The cancellation of Black Sea grain deal could impact India as it imports a major share of its sunflower oil from Ukraine and Russia. The spike in weather related uncertainties have witnessed an increase in recent times and would continue to add to the volatility in food prices. The recent escalation in crude prices could also add to the inflation buildup.

Survey participants noted that CPI inflation rate is expected to remain above Reserve Bank of India’s targeted level for the remaining part of the financial year.

On RBI’s policy action, economists were of the view that a cut in the repo rate is expected only by end of Q1or Q2 of the next fiscal year 2024-25.

On investments, participants mentioned the government’s thrust on capital expenditure has led to a crowding in of private investments and provided support to growth momentum. However, a full-fledged momentum in investments will take some more time to build in. It was felt that going forward any further recovery in private investments will be led by a pick-up in consumption activity – both domestic and external.