BENGALURU – India’s economy will slow considerably this fiscal year as the global economic slowdown impedes domestic growth prospects, according to a Reuters poll, which showed inflation will remain elevated despite recent interest rate hikes.
While the expected expansion would be faster than other major economies, it will be below the long-term average.
Growth in Asia’s third-largest economy was expected to slow to 6.0 percent in the fiscal year to end-March 2024, unchanged from a March survey, after likely growing 6.9 percent last fiscal year, according to an April 10-19 Reuters poll of 45 economists.
The Reserve Bank of India’s projection was 6.5 percent for this fiscal year. The range of forecasts in the poll had widened from last month.
All respondents in the latest poll predicted a notable deceleration in economic growth this fiscal year, with the most optimistic forecast 6.6 percent and the weakest 4.4 percent.
“With the pent-up demand induced technical rebound over, following the deep pandemic-led contraction, India’s real GDP is expected to slow down substantially…in FY24,” said Kunal Kundu, India economist at Societe Generale.
“We believe domestic demand will barely support economic activity but not drive growth. We expect public capex-led infrastructure investment to be the major growth driver, while private business capex would still likely remain quite subdued.”
