Chennai: The GDP growth for the March quarter of FY24 is estimated to moderate to 6.7 per cent, finds ICRA. For the entire year of FY24, the GDP growth could be 7.8 per cent.
The expansion of the GDP is likely to moderate to a four-quarter low 6.7 per cent in Q4 FY2024 from 8.4 per cent in Q3 FY2024 and the gross value added (GVA) is estimated to ease to 5.7 per cent from 6.5 per cent.
The gap between the GDP and the GVA growth is likely to moderate to 100 basis points in Q4 FY2024 on account of an expected lower expansion in the net indirect taxes.
For the full-year FY2024, ICRA expects the GDP and GVA growth to print at 7.8 per cent and 7 per cent, unless the growth for 9M FY2024 is revised.
For Q4, the industrial GVA might ease from 10.4 per cent in Q3 FY24 to 7.9 per cent led by sub-sectors, including manufacturing, electricity, construction and mining and quarrying.
“Lower volume growth coupled with diminishing gains from commodity prices dampening the profitability of some of the industrial sectors is expected to dampen India’s GVA growth in Q4 FY2024,” said Aditi Nayar, Chief Economist, ICRA.
As for services, GVA will moderate from 7 per cent to 6.2 per cent. Services exports decelerated to 4.2 per cent from 5.2 per cent and certain sectors like ports cargo traffic, GST e-way bills, ATF consumption, domestic airline traffic and commercial vehicle sales saw a deterioration.
Further, agricultural GVA is expected to contract by 0.5 per cent in Q4. Investment activity was healthy in Q4 FY2024, amidst a mixed trend. The y-o-y growth of the capital outlay and net lending of 24 state governments eased to 3.5 per cent from 11.5 per cent.
