India's 2024 GDP may see another push, to rise from 6.1% to 6.8%: Report

A Moody's report has predicted that India's GDP in 2024 may see a rise of 0.7 percent, according to early forecasts of the economy.

After a stellar growth recorded in the December 2023 quarter, a global rating firm has boosted the GDP projections for India in 2024. Moody's raised India's 2024 GDP growth estimate to 6.8% from 6.1%, keeping in mind the significant growth in the country's economy and exports/imports.

India's GDP is projected to grow to 6.8% percent in 2024

Further, the ratings agency predicted in its report that India's GDP growth for 2025 could be projected at 6.4 percent, as opposed to the earlier forecast of 6.3 percent.

"India's economy has performed well and stronger-than-expected data in 2023 has caused us to raise our 2024 growth estimate to 6.8 per cent from 6.1 per cent. India is likely to remain the fastest growing among G-20 economies over our forecast horizon," Moody's said in its Global Macroeconomic Outlook for 2024.

Moody's in its report said that the strong performance of the Indian economy in the September and December 2023 quarter may give a significant push to the March 2024 quarter.

"Robust goods and services tax collections, rising auto sales, consumer optimism and double-digit credit growth suggest urban consumption demand remains resilient. On the supply side, expanding manufacturing and services PMIs add to evidence of solid economic momentum," Moody's said.

Linking its predictions with the upcoming Lok Sabha polls, the agency said, “We expect policy continuity after the general election and continued focus on infrastructure development.”

The agency said while private industrial capital spending has been slow to pick up, it is expected to pick up with ongoing supply chain diversification benefits and investors' response to the government's Production Linked Incentive scheme to boost key targeted manufacturing industries.

The prediction by Moody's comes after India's real GDP expanded 8.4 per cent year-over-year in the fourth quarter of calendar year 2023, resulting in a 7.7 per cent growth for full-year 2023.

This year's interim budget targets capital expenditure allocation of ₹11.1 lakh crore or 3.4 per cent of GDP in 2024-25 (fiscal year 2025), 16.9 per cent above the 2023-24 estimates.

(With inputs from PTI)