Chennai: Credit rating agency ICRA said India’s Gross Domestic Product (GDP) would grow at 6 percent in Q3 FY2024 from 7.6 percent in Q2 FY2024.
Further, the Gross Value Added (GVA) growth is estimated to ease to 6 percent in Q3 FY2024 from 7.4 percent in Q2 FY2024, driven by the industrial and agriculture sectors, amid an improvement in the services sector.
According to ICRA, the anticipated deterioration in the industrial sector growth in Q3 FY2024 is partly attributable to an adverse base effect and a deceleration in volume expansion even as the continued deflation in commodity prices kept profitability of some sectors favourable.
Additionally, a mild 0.2 per cent contraction in the total spending of Government of India and 25 state governments (all states except Arunachal Pradesh, Goa and Manipur) in Q3 FY2024 is expected to have dulled the GVA growth in the quarter.
“Lower volume growth for the industrial sector, flagging momentum in certain indicators of investment activity, a slowdown in Government expenditure and an uneven monsoon are expected to dampen the GDP growth to 6.0 per cent in Q3 FY2024 from 7.6 percent in Q2 FY2024,” Aditi Nayar, Chief Economist, Head-Research & Outreachs said.
ICRA estimates the industrial GVA growth to record a broad-based moderation to 8.8 percent in Q3 FY2024 from 13.2 percent in Q2 FY2024, led by all four sub-sectors, namely, manufacturing, electricity, construction and mining and quarrying.
ICRA projects manufacturing GVA expansion at a healthy 10 percent in Q3 FY2024, twice as high as the 4.7 per cent seen in Q1 FY2024, albeit lower than the 13.9 per cent recorded in Q2 FY2024, amid a deceleration in volume growth as reflected in the manufacturing Index of Industrial Production (IIP).
