Comments from CRISIL and PwC on India's Q1FY24 GDP data

Dharmakirti Joshi, Chief Economist, CRISIL on first quarter GDP data

GDP growth at 7.8% in the April-June quarter was hardly a surprise. Most indicators, particularly the government frontloading its aggressive investment target for the current fiscal, were hinting at it. This is likely to be the peak growth performance for this fiscal. Growth in the July-September quarter will be moderated by softening consumption as spiking inflation will dent discretionary-spending power. For the rest of the year, headwinds from slowing global growth and the lagged impact of interest rate hikes will play out. Additionally, if dry weather conditions seen in August continue in September, agricultural output could be impacted. That said, our current forecast of 6% GDP growth for this fiscal would make India the fastest-growing G-20 country this year.

Ranen Banerjee, Partner, Economic Advisory Services, PwC India

The Q1 FY24 GDP growth came in as per expectation. The lower input prices owing to softer commodity prices, lesser disruption in mining owing to drier June, continued momentum in services, front loading of capex by government and a lower negative entry from the net exports have contributed to the relatively strong print. The achievement of the forecasted 6.5% annual growth in GDP for FY24 is likely to be challenging with a driest August and a likely dry September. This is likely to impact not only the yields from standing crops but also the winter harvest. The global headwinds are getting stronger and the private consumption moderation is also likely to put downward pressure on growth momentum.