Perspective on GDP Data by Mr. Nikhil Gupta, Chief Economist, MOFSL Group
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Below the perspective on GDP Data by Mr. Nikhil Gupta, Chief Economist, MOFSL Group
Real GDP growth 8%+ for the third consecutive quarter in 3QFY24
Likely at 6.0% YoY in 4Q to achieve 7.6% in FY24; expect 5.5-6% growth in FY25
* In another pleasant surprise, India's real GDP grew 8.4% YoY in 3QFY24, compared to the market (and our) forecast of 6.5-7%. Further, last two quarters' growth was also revised up to 8.1% (from 7.7% earlier). FY22 growth was revised up to 9.7% (from 9.1%) and FY23 was revised down to 7% (from 7.2%).
* Notably, unexpectedly sharp growth of 32% YoY in net taxes supported 8%+ GDP growth, as real GVA growth was 6.5% in the quarter.
* Details suggest that the decline in the farm sector was entirely offset by double-digit industrial growth and strong services.
* GDP break-up, however, remains unconvincing. Private and government consumption expenditure was very weak, while investments grew strongly and 'discrepancies' contributed immensely to real GDP growth.
* Going forward, we expect real GDP growth to ease towards ~6% in 4Q (from 5.6% expected earlier), which is in line with CSO's forecast, leading to 7.6% growth in FY24. For FY25E, we expect growth to ease to 5.5-6% (from 5.4% expected earlier).
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