India’s GDP to Grow 7.8% in FY24, Barclays says after Q3 data

India's GDP forecast upgraded to 7.8% for Fy24 by Barclays following strong Q3 performance

According to the most recent projection of Barclays, a British multinational investment bank, India's GDP would develop at a solid 7.8% in fiscal year 2023–24. Following the announcement of excellent GDP statistics for the Q3 Data of 2023-24, the bank increased its growth prediction for India by 110 basis points.

The National Statistical Office (NSO) revealed that India's GDP increased by 8.4% in the October-December quarter of 2023, exceeding the predictions of most analysts and economists. The good performance was led by the revival of the manufacturing, mining quarrying, and construction sectors, which increased by 10.1%, 9.5%, and 9.2%, respectively.

Barclays also boosted its fiscal year 2024-25 growth prediction by 50 basis points to 7%, citing a stronger outlook for the domestic and global economies. The bank expects India to gain from removing pandemic-related restrictions, accelerating the vaccination effort, restoring consumer and corporate confidence, and continuing fiscal and monetary policy assistance.

According to Barclays, faster-than-expected growth may enable the Reserve Bank of India (RBI) to retain the repo rate at 6.5% for an extended time. At the same time, it expects inflation to return to its target range of 2-6%. The bank anticipates the RBI to begin raising the repo rate by 25 basis points in the second quarter of 2025, as the production gap narrows and inflationary pressures rise.

The Indian economy is recuperating from the terrible shock of the COVID-19 epidemic, which resulted in an unprecedented 7% recession in 2022–23. The economy remains below pre-pandemic levels and faces several obstacles, including the appearance of new virus varieties, the unequal rate of recovery across sectors and regions, the high level of public debt, and social and environmental concerns.

However, India has certain characteristics and prospects that might help it achieve long-term growth. India has a huge and youthful population, a vibrant and enterprising private sector, a diverse and resilient export portfolio, a strong and stable financial system, and a forward-thinking and reform-minded administration. India can profit from the global transition toward green and digital technology, as well as take an active part in regional and global affairs. As a result, India's GDP growth outlook remains favorable as the economy recovers from the pandemic-induced slowdown. India is predicted to be one of the world's fastest-growing major economies, reaching its goal of being a US$5 trillion economy by 2026.