Morgan Stanley Research expects India’s GDP growth for the financial year 2025 to be moderate accounting to 6.5 percent from 6.9 percent. While on the other hand, ICRA has projected the YoY growth of the GDP to moderate in the third quarter of FY24, sequentially accounting to 6 percent led by agriculture and industry sectors.
“Lower volume growth for the industrial sector, flagging momentum in certain indicators of investment activity, a slowdown in government expenditure and an uneven monsoon are expected to dampen the GDP growth to 6.0 per cent in the third quarter of FY24 from 7.6 per cent in the second quarter of FY24,” Aditi Nayar, Chief Economist, Head-Research & Outreach, ICRA Ltd. While highlighting that risks emanate from global factors and elections in May 2024, Morgan Stanley Research’s report said that it maintained a constructive outlook on the Indian economy.
“Domestic demand improved in January, while macro stability remains comfortable, reflecting strength in the fundamentals. We maintain our constructive outlook on the economy,” Morgan Stanley Research said in its report titled 'India Economics – Macro Indicators Chartbook: Strength in Growth, Stability in Macro-Fundamentals'.
Moreover, Morgan Stanley Research has projected the growth for the third quarter of FY24 ending December 2023 at 6.5 percent, expecting the GDP growth to remain healthy, even as it slows from 7.7 per cent in the first half of the current financial year.
Supported by strength in services exports and softening global commodity prices, especially oil, the current account deficit is likely to remain benign as per the research arm of the investment.
The ICRA report said that the government’s gross capital expenditure dipped slightly in the October-December 2023 period to 24.4 percent from 26.4 percent in the previous quarter. The ICRA noted a slowing down of investment activity in the third quarter of the current financial year. Also, after having surged by 42.4 per cent in the second quarter of FY24, the capital outlay and net lending of 25 state governments shrank by 3.9 percent on a year-on-year basis
