OECD Raises India’s Growth Forecast To 5.9% for FY24 from 5.7% Earlier

The Organisation for Economic Cooperation and Development (OECD) has revised upwards India’s growth forecast to 5.9 per cent for FY24, from 5.7 per cent in November.

In its latest interim outlook, titled ‘Fragile Recovery’, the OECD said, “India’s growth is projected to moderate to about 6 per cent in FY2023-24, amid tighter financial conditions before picking up to recover to around 7 per cent in FY 2024-25.”

OECD has also said India’s GDP growth slowed down sequentially to 0.7 per cent in the December 2022 quarter compared with 1.7 per cent in the September 2022 quarter based on seasonally adjusted quarter-on-quarter data.

Alvaro Santos Pereira, acting chief economist, OECD, “We are impressed by the reforms India has been taking over the years. Also, steps like trying to open up the economy. We want India to keep the reform state of mind.”

Rating agency Crisil has also said the economy is likely to log in a tepid 6 per cent growth next fiscal, in line with the consensus estimates. The agency also sees the economy averaging a growth rate of 6.8 per cent over the next five fiscals. Crisil further said it expects the corporate revenue to log in double-digit rise again next fiscal.

The National Statistical Organisation (NSO) had pencilled in a 7 per cent growth for the outgoing fiscal — something most analysts consider to be an ambitious number because for the economy to close the year with 7 per cent growth, it will have to grow at over 4.5 per cent in the present quarter of fiscal 2023, which looks ambitious.

said more positive signs have started to appear in the global economy, with business and consumer sentiment starting to improve, food and energy prices falling back, and the full reopening of China. Growth in China is projected to rebound to 5.3 per cent in 2023, before easing to 4.9 per cent in 2024.

“Global growth is projected to remain at below trend rates in 2023 and 2024, at 2.6 per cent and 2.9 per cent, respectively, with policy tightening continuing to take effect. Nonetheless, a gradual improvement is projected through 2023-24 as the drag on incomes from high inflation recedes,” the report said.

It also said risks have become somewhat better-balanced, but remain tilted to the downside. “Uncertainty about the course of the war in Ukraine and its broader consequences is a key concern. The strength of the impact from monetary policy changes is difficult to gauge and could continue to expose financial vulnerabilities from high debt and stretched asset valuations, and also in specific financial market segments. Pressures in global energy markets could also reappear, leading to renewed price spikes and higher inflation.”

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