New Delhi: As the government is poised to unveil its Gross Domestic Product (GDP) data for the first quarter of the fiscal year 2024-25, there is a spectrum of expectations, influenced by a variety of economic factors.
The forthcoming statistics are anticipated to mirror the effects of recent heatwaves and the ongoing electoral cycle, which might have contributed to a slowdown in economic growth.
Nonetheless, a report by Equius Securities indicates that analysts maintain a positive outlook, observing no definitive signs of a downturn. This suggests that any temporary stagnation could be reversed with favorable weather conditions and the onset of the festive season.
"While there are no indications of a downturn, it could be a temporary setback. Nonetheless, the prospects appear optimistic, with macroeconomic indicators holding strong," the report states.
Furthermore, the report highlights the resilience of the Indian economy, supported by stable macroeconomic indicators such as controlled twin deficits and sufficient reserves.
Despite the challenges posed by climate conditions and external demand, the report notes that the overall outlook for the Indian economy remains favorable.
"The temporary slowdown could well reverse with favorable weather conditions and the festive season approaching," the report concludes.
The potential for a resurgence in economic growth is strengthened by the improvement in consumer sentiment and the recovery of the rural economy, as food prices stabilize and inflation moderates. The report also mentions that the release of GDP data is occurring at a critical juncture, coinciding with the Reserve Bank of India's (RBI) policy meeting scheduled shortly thereafter.
Additionally, the report points out that the tenure of two external members of the RBI, known for their dovish stance, is coming to an end. This raises questions regarding the future direction of monetary policy. Should these members be replaced by more neutral or hawkish individuals, the RBI's approach to rate cuts could be altered, potentially prolonging the pause in monetary easing.
"The tenure of the three external RBI members is nearing its end. Their terms will conclude on October 4th, with the next policy meeting scheduled for October 9th. It is important to note that Dr. Das's term also ends in December 2024. Therefore, the policy decisions may be in the hands of the incoming governor in 2025," the report concludes.
While the anticipation surrounding India's GDP figures is currently moderated due to recent obstacles, the broader economic environment continues to exhibit potential for growth. The interplay among seasonal dynamics, policy initiatives, and external influences is pivotal in determining the future direction of India's economic expansion. Upon the release of the data, there will be a heightened focus on the manner in which these factors align to impact the nation's economic perspective.
India's gross domestic product (GDP) has exceeded expectations, reaching a figure of 7.8 percent for the January-March period. Furthermore, the full-year GDP for 2023-24 has been revised upward to 8.2 percent, an increase from the initial estimate of 7.6 percent, as per information provided by the Ministry of Statistics and Programme Implementation.
Additionally, the data has indicated a significant increase in real GDP to Rs 173.82 lakh crore for the fiscal year 2023-24, marking a rise from the previous fiscal year's figure of Rs 160.71 lakh crore.
