INDIAN ECONOMY TO ACHIEVE 6.5% PLUS GROWTH ON RESILIENT CONSUMPTION, INVESTMENT

Even as curtains come down on a turbulent year underlined by the deceleration of the world economy, the growth acceleration of the Indian economy in H1 of FY24 presents a happy contrast with India expected to comfortably achieve a GDP uptick over 6.5 per cent in FY24, buoyed by the better-than-expected growth in Q2 of FY24 and the emergence of India as the fastest-growing major economy in H1 of FY24 improving the growth prospects, according to the half yearly review of the Finance Ministry.

- NIVEDITA MUKHERJEE

The review however, notes that globally, trends are different with geopolitical tensions persisting, a tightened monetary stance which has weakened global economic activity and increases in policy rates that have tempered inflation but not enough to lower it to country targets. The report cautions about a prolonged monetary tightening which can cause a still lower growth of the global output.

The report builds an optimistic narrative for India on various domestic and international agencies which have been prompted to upgrade their GDP growth projections for FY24, as the momentum gained in Q2 of FY24 appeared likely to be sustained in Q3 as well. India’s real GDP grew by a healthy 7.6 per cent on a YoY basis in Q2 of FY 2024. This growth is not only higher than the median projections of 6.8 per cent by professional forecasters but also their highest projection of 7.4 per cent. The resilient performance has led to a real GDP growth of 7.7 per cent in H1 of FY24, prompting RBI to revise the full-year growth projection from 6.5 per cent to 7.0 per cent, the review observes.