India’s Chief Economic Adviser V. Anantha Nageswaran has said that the Indian economy is likely to have grown at a robust 8 per cent in 2023-24, exceeding initial projections, with the possibility of even higher growth.
His upbeat assessment is based on the economy’s strong performance in the first three-quarters of the last fiscal, with GDP expanding 7.8 per cent, 7.6 per cent, and 8.4 per cent respectively. This surpasses estimates from the International Monetary Fund (IMF) at 7.8 per cent and the Reserve Bank of India (RBI) at 7.5 per cent.
The National Statistical Office (NSO) in its second advance estimate published in February, projected GDP growth for 2023-24 at 7.6 per cent compared with 7 per cent in 2022-23. It saw nominal GDP growth in 2023-24 at 9 per cent. The provisional GDP figures for the last fiscal will come out on May 31, 2024.
At an event organised by the NCAER (National Council of Applied Economic Research), the CEA said that “The IMF has projected a growth rate of 7.8 per cent for 2023-24. But if you look at the trajectory of growth in the first three quarters, obviously, the possibility that the growth rate touches 8 per cent is quite high.”
However, he said, a lot would depend on how the monsoon shapes up. The expectations are of above-normal monsoon, but the rains may vary across regions and over time. He further added that he doesn’t foresee any significant upside risk to inflation at the moment and expects retail inflation to remain within the midpoint of the RBI’s target range of 2-6 per cent in 2024-25.
“There can always be scenarios on the geopolitical front that can cause inflation to be more than what we expect. But at this point, our baseline scenario is that inflation gradually converges towards the midpoint of the target range in 2024-25,” he said.
The consumer price index (CPI)-based retail inflation fell to 4.85 per cent in March, dipping below 5 per cent for the first time since November 2023, mainly due to a decline in food and fuel prices and a continued easing in core inflation.
