RBI Monetary policy: GDP growth estimate for FY24 maintained at 6.50%
1 min read 08 Jun 2023, 10:27 AM ISTGDP growth estimate for FY24 maintained at 6.50%
PremiumIn the recent data released during RBI Monetary Policy meeting , Real GDP growth projections for the financial year 2023-24 is projected at 6.5 percent with Q1 projections being 8 percent, Q2 projections being 6.5 percent, Q3 projections being 6 percent and Q4 projections being 5.7 percent.
GDP growth estimates for Q1 and Q2 are increased while for Q3 & Q4, estimates are are reduced.
On the demand side, Real GDP for financial year 2022 -23 recorded 7.2 percent growth, performed stronger than the earlier estimate of 7.2 percent, surpassed pre-pandemic levels by 10.1 percent. Real GDP growth in Q4 of 2022-23 accelerated to 6.1 percent year over year from 4.5 percent of Q3 of last year aided by fixed investment and higher net exports.
On the supply side, Real Gross Value added accelerated from 4.7 percent in Q3 to to 6.5 percent in Q4 driven by rebound in manufacturing activity which moved into expansion territory after two quarters of contraction.
Domestic demand conditions remain supportive of growth for financial year 2023-24 due to improvement in household consumption and investment activity. Urban demand remains resilient with indicators such as passenger vehicle sale, domestic air passenger traffic and credit cards outstanding indicating double digit expansion year over year . Rural demand also on revival path with an increase in motorcycle and three wheeler sale while tractor sales remain subdued.
Growth in steel consumption and cement output and production and imports of capital goods suggest continued buoyancy in investment activity. Double digit growth of 15.6 percent in non foodbank credit was observed, the flow of resources in the commercial sector in the current financial year increased to 2.7 lakh crores from 1 lakh crore during the same period last year. Fixed investment by manufacturing companies expanded in financial year 2022-23, reversing contraction experienced in 2021-22.
