India likely to report higher GDP growth estimates for 2023/24

India GDP in focus: India is expected to announce an increased economic growth projection of around 7 per cent for the fiscal year 2023/24 ending in March, surpassing earlier government forecasts, as per the National Statistical Office's first advance GDP estimates scheduled for release on Friday.

The upward revision aligns with the Reserve Bank of India's (RBI) recent adjustment of its growth forecast to 7 per cent for the current fiscal year, up from the initial estimate of 6.5 per cent. 

RBI Deputy Governor Michael Patra described the revised forecast as "conservative," considering strong growth reflected in high-frequency indicators for October and November. 

Prime Minister Narendra Modi's increased state spending on infrastructure projects aims to boost economic growth amid subdued consumer spending, potentially supporting his re-election bid in the upcoming national election. 

The country's economy exceeded expectations, growing at 7.6 per cent year-on-year in the September quarter. Private economists have revised yearly estimates upwards, and S&P Global Ratings anticipates India to be the fastest-growing major economy for the next three years, potentially becoming the world's third-largest economy by 2030. 

S&P projects India's current 6.4 per cent growth to accelerate to 7 per cent by fiscal 2027. In contrast, it foresees China's growth slowing to 4.6 per cent by 2026 from an estimated 5.4 per cent this year. 

Despite the positive economic outlook, economists believe the RBI's monetary policy committee (MPC) is unlikely to reduce the benchmark policy rate of 6.5 per cent in the next few quarters due to the risk of a spike in food inflation in the election year.

(With Reuters Inputs)