- After a revision by the Reserve Bank of India (RBI), the annual gross domestic product (GDP) is expected to increase.
- The revised growth forecast for the current fiscal year is 7%, up from 6.5%.
- These GDP estimates will undergo six revisions and will be released on Friday.
- Increased government spending on infrastructure projects is anticipated to boost economic growth.
- The Indian economy has had better growth than expected, reaching 7.6% in the September quarter.
- According to S&P Global Ratings, India is forecasted to be the world’s fastest-growing economy in the next three years and the third-largest by 2030.
RBI Forecasts Economic Growth
The recent increase in the country’s annual gross domestic product prediction comes after the Reserve Bank of India (RBI) hiked its growth forecast for the current fiscal year to 7% from an earlier estimate of 6.5%.
GDP Estimates Release
On Friday at 1200 GMT, the latest GDP figures, which undergo six modifications over time, will be made public.
Growth Forecast for 2023/24
According to RBI’s deputy governor Michael Patra, the central bank’s revised 7% growth forecast for 2023/24 was made with consideration for the robust growth indicated by high-frequency data in October and November.
Government Spending and Economic Growth
Prime Minister Narendra Modi has ramped up government spending on infrastructure projects to stimulate economic growth, a move that analysts believe will possibly secure him a third term in the national elections set for May.
Indian Economy Growth
India’s economic growth rate has surpassed expectations, rising to 7.6% on a year-on-year basis in the quarter of September, after increasing by 7.8% in the previous quarter. The strong performance has led several private economists to revise their yearly growth estimates upwards.
Future Economy Prospects
S&P Global Ratings anticipates that India will remain the world’s fastest-growing major economy for the next three years, on pace to become the world’s third-largest economy within the decade. S&P predicts India’s growth rate will reach 6.4% this fiscal year and continue to surge to 7% by fiscal 2027.
Comparison with China
By 2026, S&P expects China’s growth to decline to 4.6% from an estimated 5.4% this year.
RBI Monetary Policy Committee’s Stance
Economists anticipate that the Reserve Bank of India’s monetary policy committee is unlikely to reduce its benchmark policy rate of 6.5% in the coming quarters. This decision is prompted by the risk of a surge in food inflation during election year.
This predicted growth in the Indian economy can impact foreign exchange or trading, particularly in assets related to the Indian Rupee, infrastructure, and food commodities. This prospect provides broad opportunities for future investments.