Indian GDP growth likely to hit 4.5-5% in Q4 FY23 from Q3's 4.4%: ICRA

The unseasonal rainfall in mid-March could adversely affect crop yields.

ICRA expects consumer sentiments to improve throughout FY24 auguring well for consumption demand, although it would remain uneven.

The potential return of El Nino conditions could hurt the prospects of crop output and rural demand, and put upward pressure on food inflation, ICRA noted.

ICRA expects the country’s GDP growth to moderate to 6 per cent in FY24 from 6.9 per cent expected in FY23.

The ICRA business activity monitor recorded an improved YoY expansion of 11.7% per cent in January-February FY23, relative to 9.9 per cent seen in Q3 FY23.

While the index exceeded the pre-COVID levels of January-February 2020 by a robust 15.3 per cent, this was lower than the 18.2 per cent expansion seen in Q3 FY23.

ICRA foresees two key risks that could contain the pick-up in consumption. The first stems from sustained elevated inflation. Second, crop damage on account of a heat wave or excess unseasonal rains or a shortfall in monsoons could also affect farm incomes and rural consumption.

ALCHEMPro News Desk (DS)