India's GDP Growth to Moderate to 6% in Q1 FY25: ICRA
By Rediff Money Desk, New Delhi Aug 22, 2024 12:54
ICRA projects India's GDP growth to slow to 6% in Q1 FY25, citing weak government spending and urban consumer demand. The agency expects full-year growth at 6.8%.
![India's GDP Growth to Moderate to 6% in Q1 FY25: ICRA](https://im.rediff.com/money/2024/mar/10india-gdp.jpg)
Photograph: ANI Photo
New Delhi, Aug 22 (PTI) ICRA on Thursday projected India's economic growth to moderate to a six-quarter low of 6 per cent in April-June on account of contraction in government capital expenditure and a dip in urban consumer demand.
For the full fiscal 2024-25, ICRA expects GDP to grow 6.8 per cent, lower than the 8.2 per cent clocked in 2023-24.
"ICRA has projected the year-on-year (YoY) expansion of the GDP to moderate to six-quarter low of 6 per cent in Q1 FY2025 from 7.8 per cent in Q4 FY2024, amidst a contraction in government capital expenditure and a dip in urban consumer confidence," the domestic rating agency said in a statement.
The official data for June quarter growth will be released by MoSPI (Ministry of Statistics and Programme Implementation) on August 30.
The growth in the June quarter (Q1) of 2023-24 was 8.2 per cent.
ICRA Chief Economist Aditi Nayar said the June quarter of the current fiscal saw a temporary lull in some sectors due to the Parliamentary elections and sluggish government capex at both the central and state levels.
Further, she said urban consumer confidence reported a surprising downtick, as per the Consumer Confidence Survey of the Reserve Bank of India. Meanwhile, the lingering impact of last year's unfavourable monsoon and an uneven start to the 2024 monsoon prevented a broader improvement in rural sentiment.
"Lower volume growth combined with diminishing gains from commodity prices weighed upon the profitability of some of the industrial sectors.
"The heat wave also affected footfalls in various service sectors, even as it provided a significant boost to electricity demand. On balance, we foresee a transient moderation in India's GVA (Gross value added) and GDP (Gross domestic product) growth in Q1 FY25 to 5.7 per cent and 6 per cent, respectively," Nayar said.
For the full-year FY2025, ICRA expects a back-ended pick-up in economic activity to boost the GDP and GVA growth to 6.8 per cent and 6.5 per cent respectively.
In particular, there is considerable headroom for the GoI's capital expenditure, which needs to expand by 39 per cent in YoY terms in July-March FY2025 to meet the Budget estimate for the full year. This is expected to catapult GDP growth back above 7 per cent in the second half of FY2025, Nayar added.
For the full fiscal 2024-25, ICRA expects GDP to grow 6.8 per cent, lower than the 8.2 per cent clocked in 2023-24.
"ICRA has projected the year-on-year (YoY) expansion of the GDP to moderate to six-quarter low of 6 per cent in Q1 FY2025 from 7.8 per cent in Q4 FY2024, amidst a contraction in government capital expenditure and a dip in urban consumer confidence," the domestic rating agency said in a statement.
The official data for June quarter growth will be released by MoSPI (Ministry of Statistics and Programme Implementation) on August 30.
The growth in the June quarter (Q1) of 2023-24 was 8.2 per cent.
ICRA Chief Economist Aditi Nayar said the June quarter of the current fiscal saw a temporary lull in some sectors due to the Parliamentary elections and sluggish government capex at both the central and state levels.
Further, she said urban consumer confidence reported a surprising downtick, as per the Consumer Confidence Survey of the Reserve Bank of India. Meanwhile, the lingering impact of last year's unfavourable monsoon and an uneven start to the 2024 monsoon prevented a broader improvement in rural sentiment.
"Lower volume growth combined with diminishing gains from commodity prices weighed upon the profitability of some of the industrial sectors.
"The heat wave also affected footfalls in various service sectors, even as it provided a significant boost to electricity demand. On balance, we foresee a transient moderation in India's GVA (Gross value added) and GDP (Gross domestic product) growth in Q1 FY25 to 5.7 per cent and 6 per cent, respectively," Nayar said.
For the full-year FY2025, ICRA expects a back-ended pick-up in economic activity to boost the GDP and GVA growth to 6.8 per cent and 6.5 per cent respectively.
In particular, there is considerable headroom for the GoI's capital expenditure, which needs to expand by 39 per cent in YoY terms in July-March FY2025 to meet the Budget estimate for the full year. This is expected to catapult GDP growth back above 7 per cent in the second half of FY2025, Nayar added.
Source: PTI
Read More On:
DISCLAIMER - This article is from a syndicated feed. The original source is responsible for accuracy, views & content ownership. Views expressed may not reflect those of rediff.com India Limited.
You May Like To Read
TODAY'S MOST TRADED COMPANIES
- Company Name
- Price
- Volume
- FSN E-Commerce Ventu
- 226.90 (+ 7.84)
- 44986839
- Rajnish Wellness
- 4.35 (+ 9.85)
- 42383762
- Reliance Power L
- 34.45 ( -4.99)
- 37949700
- GTL Infrastructure
- 2.81 ( -2.09)
- 34669129
- ARC Finance
- 1.33 (+ 4.72)
- 30775342
MORE NEWS
![India-Seychelles...](https://im.rediff.com/80-80/money/2018/apr/05commonwealth.jpg)
India-Seychelles Trade Ties Strengthen:...
India and Seychelles are exploring stronger business ties with opportunities for Indian...
Funskool Brings CATAN Board Game to India | MRF...
Funskool India, backed by MRF Group, has secured rights from Asmodee to distribute the...
Jeyyam Global Foods IPO: Rs 80-82 cr Raise, Sep...
Jeyyam Global Foods, a leading supplier of Bengal gram and fried gram, is launching an...