GDP for Q3 FY24 expected to be 6.8%: SBI Ecowrap

GDP for Q3 FY24 is expected to be 6.8 per cent, stated the latest SBI Ecowrap report. This is slightly higher than the expectation of the Reserve Bank of India that pegged the GDP growth of Q2 FY24 at 6.5 per cent. Credit rating agency, however, pegged the Q3 FY24 growth at 6 per cent. 

According to the Ecowrap, GDP should grow in the range of 6.7-6.9 per cent, factoring in the slight decline in economic activity in the third quarter. The Ecowrap report stated that its estimates are corroborated with the in-house developed SBI-ANN (Artificial Neural Network) model, with 30 high frequency indicators. 

The report stated that corporate India continued its robust performance buoyed by incrementally accelerating consumption patterns across urban-rural landscape. Corporate results from 4,000 listed entities for Q3 FY24 show robust growth of more than 30 per cent in both EBIDTA and PAW, while top line grew by around 7 per cent compared the same period previous year.

As per first advance estimates, the estimated production of major kharif crops for 2023-24 saw a decline of 4.6 per cent to 148.5 MMT. The sowing season of rabi crops indicate a slight increase in overall acreage, concerns arose over the sown area under cereals that saw a decline of 6.5 per cent from the previous year. 

“While agriculture may see some moderation if the rabi output does not offset the kharif shortfall value added in agriculture will decline. The inland fish production has shown a rapid growth from 2014-15 to 2022-23 and reached 131.13 lakh tonnes in 2022-23,” the report stated. 

The Ecowrap report further stated that the likelihood of the global economy exhibiting stronger than expected growth in 2023 has brightened in recent months with risks broadly balanced.

The global economic complexity is intensified due to a significant slowdown in China, attributed to deflationary fears, primarily due to a property bubble and local government debt, which has slowed down bank lending despite recent rate cuts aimed at boosting demand, the report stated. China's ongoing struggles with technological and strategic isolation on a global scale pose a threat to the industrial and commodity demands, especially as the world is gradually recovering from the recent disruptions, it added. However, in contrast to the global economic gloom, India is witnessing a boost in consumer confidence, largely driven by a positive outlook on the overall economic situation and employment conditions, the report stated.