After becoming the 5th largest economy in the world, India is poised to become a 5 trillion economy. Meanwhile, agencies around the world are giving very positive signals about India. Meanwhile, rating agency ICRA has also given a bullish forecast about India’s economy. ICRA Ratings in a report released on Tuesday estimated that India’s gross domestic product (GDP) growth could reach 8.5 percent in the first (April-June) quarter of the current fiscal year.
The rate of economic growth in the last i.e. January-March quarter was 6.1 percent. Growth is expected to remain strong due to favorable base effect and improvement in the services sector, the rating agency said. The Reserve Bank of India (RBI) has projected a growth rate of 8.1 percent in the April-June 2023 quarter. Thus ICRA’s estimate is higher than the Central Bank’s estimate.
ICRA Chief Economist Aditi Nair said that negative conditions can be seen in the second half of the current financial year. He said erratic rains, a narrowing of commodity price differentials from a year ago and a slowdown in the pace of government capital spending continued. “GDP growth will remain limited as we approach parliamentary elections,” he said.
ICRA has maintained its growth forecast for FY 2023-24 at 6 percent. This is lower than RBI’s estimate of 6.5 percent. Nair said unseasonal heavy rains in the first quarter, easing of fiscal tightening and weak external demand weighed on GDP growth.
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