India’s GDP likely grew below 7% in Q4FY24; 5 experts share their views on Indian growth outlook

India's Q4FY24 GDP growth is expected to be below 7 per cent due to tepid rural consumption and sticky inflation, with experts predicting growth driven by government capex, construction, and manufacturing activities.

Nishant Kumar
Updated28 May 2024
India's Q4FY24 GDP is likely to see an annual growth of below 7 per cent compared to 8.4 per cent during Q3FY24.
India’s Q4FY24 GDP is likely to see an annual growth of below 7 per cent compared to 8.4 per cent during Q3FY24.(Pixabay)

India's gross domestic product (GDP) for the March quarter of the last financial year (Q4FY24) is likely to see an annual growth of below 7 per cent compared to 8.4 per cent during the October-December quarter of FY24 (Q3FY24).

Experts believe government capex, construction, and manufacturing activities will likely drive GDP growth in Q4FY24. However, tepid rural consumption and sticky inflation remain a concern, weighing on overall growth.

According to a Reuters poll of 54 economists, the Indian economy likely slowed to an annual 6.7 per cent in January-March, more in line with the long-term GDP growth rate. GVA growth was expected to slow to 6.2 per cent.

Most economists in the poll said a slowdown in economic growth could be caused by moderation in the manufacturing and services sectors and a muted contribution from the agriculture sector.

Also Read: India's economy likely slowed to an annual 6.7% in January-March, its weakest pace in a year, finds report

We collated the views of several economists and experts to know what they expect about India's Q4FY24 GDP growth and the road ahead. Here's what they said:

Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Shares and Stock Brokers

Hajra expects India's GDP to grow by 6.9 per cent in the final quarter of FY24, as net of taxes minus subsidies is expected to bring down the numbers compared to the previous three quarters. The full-year GDP is expected to grow by 7.8 per cent. 

For FY25, growth is projected at 6.9 per cent. 

He expects some slowdown in the first quarter due to ongoing elections, delays in the commencement of new projects, and supply chain and labour shortage issues. 

However, he expects growth to pick up in the following quarters, with expectations of normal monsoon and easing financial conditions in the final quarters of the fiscal year as RBI is expected to embark on its rate cut cycle.

Also Read: India F24 GDP growth likely hit 8%, to grow 7% in FY25: CEA Nageswaran

Madhavi Arora, Lead Economist, Emkay Global

Arora believes there could be a repeat of Q3FY24 big upside surprise in GDP growth and a high wedge between GDP and GVA growth in Q4 as well. 

"While the implied GDP and GVA growth for Q4FY24 (if one goes by NSO estimates for FY24) is 5.9 per cent and 5.4 per cent, respectively, the implied NIT (net indirect taxes) growth is estimated at nearly 9-10 per cent," said Arora. 

Also Read: Goldman Sachs raises India’s GDP growth forecast to 6.7% for 2024; expects RBI repo rate cut in December quarter

Arora added that the fiscal data for the Centre and states so far reveals that subsidies/NIT are again tracking much lower than the previous year (down nearly 30 per cent), which could artificially push the Q4FY24 GDP print to nearly 6.9-7 per cent versus 5.9 per cent estimated in NSO, even as GVA growth may still stay shy of 6 per cent. 

This will likely push up FY24 full-year growth to close to 7.8-8 per cent versus NSO’s revised annual FY24 forecast of 7.6 per cent, said Arora.

"Overall, higher FY24 growth also means that the base for FY25 will be much higher. We see FY25E GDP moderating to nearly 6.5 per cent from 8 per cent in FY24E, while production-side GVA growth will be only a tad lower at 6.3-6.4 per cent from 7 per cent in FY24E. GVA growth is relatively less volatile and the massive GDP-GVA wedge seen in FY24 will likely normalise by FY25," Arora said.

While global growth may stay supportive in the first half of the current calendar year (H1CY24), Arora believes domestic economic activity would be supported by a sustained investment cycle based on the government’s continued thrust on capital expenditure and increasing capacity utilisation. 

Private sector investment seems to be picking up, with higher capacity utilisation, but we still await the private sector investment cycle to see a meaningful upturn. 

Meanwhile, the rural-urban divide may narrow slightly as rural picks up pace while urban growth normalises, Arora observed.

Also Read: Normal rains, stable food prices to firewall India, says finance ministry review

Ajit Mishra, SVP, Research, Religare Broking

Mishra anticipates GDP growth of approximately 6.1-6.5 per cent for Q4FY24, lower than the 8.4 per cent growth recorded in Q3FY24, and around 7.4-7.8 per cent for FY24. 

Growth in Q4 FY24 is likely to be driven by construction and manufacturing activities, as well as government investment in capital expenditures. However, rural consumption has not increased as expected but is gradually improving. 

Additionally, fluctuating inflation remains a concern that could impact overall growth. 

In FY25, Mishra expects the economy to maintain its growth momentum, driven by private capital expenditures and a revival in rural consumption, showing early signs of recovery as inflation eases. 

Additionally, the potential reduction in interest rates in the second half of the year could further stimulate private capital investments, boosting economic growth. 

The recent transfer of funds from the RBI to the government may also help manage the central government's liquidity. Considering these factors, Mishra projects FY25 GDP growth to be 7-7.4 per cent.


ICRA has projected the GDP's year-on-year (YoY) expansion to moderate to a four-quarter low of 6.7 per cent in Q4FY24 from 8.4 per cent in Q3 FY24. 

The gap between the GDP and the GVA growth is likely to moderate to nearly 100 basis points (bps) in Q4 FY24 from the particularly high 185 bps in the previous quarter.

“Lower volume growth coupled with diminishing gains from commodity prices dampening the profitability of some of the industrial sectors is expected to dampen India’s GVA growth in Q4 FY2024,” said Aditi Nayar, chief economist and the head of research and outreach at ICRA.

Also Read: India's Q4 GDP growth expected to moderate to 6.7%, says rating agency ICRA

Nirmal Bang Institutional Equities

The brokerage firm pegs Q4FY24 GDP growth at 6.5 per cent YoY mainly because net indirect taxes are likely to see elevated growth due to lower subsidy payouts, similar to Q3FY24, albeit at a slower pace. 

GVA growth is likely to be relatively muted at 5.4 per cent YoY. 

The brokerage firm has raised its FY24 GDP growth estimate to 7.8 per cent from 7.5 per cent earlier, led by slightly higher-than-expected growth in Q4FY24.

Nirmal Bang expects core GDP growth, excluding agri and government spending, to moderate to 6.2 per cent YoY in Q4FY24 from 8.4 per cent in Q3FY24. This will be led by moderation in manufacturing sector growth due to slower growth in corporate profitability.

"We have also raised our GDP growth forecast for FY25 to 6.6 per cent from 6.2 per cent as high-frequency indicators suggest continued resilience. Global growth also seems resilient, while domestic capex growth is expected to be sustained. Rural growth seems to be at the cusp of a turnaround. Urban growth is, however, likely to plateau," said Nirmal Bang.

Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.

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HomeEconomyIndia’s GDP likely grew below 7% in Q4FY24; 5 experts share their views on Indian growth outlook

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