Finance Ministry confident GDP growth rate will easily exceed 6.5 per cent in 2023-24

New Delhi (Uttam Hindu News): In the Finance Ministry’s half-yearly economic review report released on Friday, the government has expressed hope that the Indian economy’s gross domestic product (GDP) growth rate in 2023-24 will exceed its forecast of 6.5 per cent despite risks to the outlook for global growth and stability. Will cross with ease.

Better-than-expected growth in the second quarter of FY 2023-24 and India’s emergence as the fastest growing major economy in the first half have improved growth prospects and led various domestic and international agencies to estimate GDP growth for the current financial year. This has led to an upgrade in growth projections. The momentum gained in the second quarter of the financial year is likely to continue in the third quarter as well.
High frequency indicators in India for October and November 2023 show strong economic activity. PMI manufacturing and services rose in October and November.
The October 2023 marks of the IIP and indices of eight core industries also point to continued growth in manufacturing activity, the report said.

Sentiments in the services sector remain upbeat and motivated with the boom in the tourism cum hotel industry driven by leisure travel, business travel and social events. Growth in consumption demand is expected to continue. Urban demand conditions remain resilient with high growth in auto sales, fuel consumption and UPI transactions. It said rural demand is also growing, which is reflected in the strong growth in two-wheeler and three-wheeler sales.

On the inflation front, overall inflation has been declining, with a steady decline in core inflation and sustained deflation in fuel inflation, despite temporary disruptions from food prices. RBI has estimated inflation to average 5.4 percent in the current financial year. The outlook for India’s external sector is promising, as seen in the November release of the trade balance for both services and goods.

A relatively stable Indian rupee against the US dollar and other major currencies and ample foreign exchange reserves add to the optimism. This optimism is reflected in the revival of foreign portfolio investment in FY 2023-24 from November 2023 onwards and in general in FY 2023-24 compared to FY 2023. According to the report, foreign investment inflows are also helping Indian stock market indices climb to new highs, reflecting widespread optimism among domestic and foreign investors on growth prospects.