Just hours after the statistics ministry announced that India’s GDP grew 7.8 percent in April-June – the fastest in four quarters – several economists announced upward revisions to their growth forecasts, with Nomura predicting growth for 2023-24 a 40 basis point rise is the largest of them all.

“…April-June actual GDP growth and July-September projections are above our current baseline. Therefore, we are raising our GDP growth forecast for 2023 to 6.3 percent from the previous 5.9 percent and for 2023-24 to 5.9 percent from the previous 5.5 percent,” Nomura economists Sonal Varma and Aurodeep Nandi said in a statement September 1 note.

Deutsche Bank also raised its growth forecast for India by 20 basis points to 6.2 percent, while Morgan Stanley also announced a similar increase to 6.4 percent. Others, like Motilal Oswal Financial Services, are likely to follow suit.

“On the back of better-than-expected growth in April-June, we will soon be raising our forecast for 2023-24 real GDP growth from the 5.6 percent forecast in June,” said Nikhil Gupta, chief economist at Motilal Oswal Financial Services.

Meanwhile, Moody’s Investors Service significantly increased its growth forecast for India for calendar year 2023 to 6.7 percent from 5.5 percent.

Also Read: CEA Nageswaran Calls First Quarter GDP Growth Figures “Good” and Holds FY24 Forecast of 6.5%

For the period 2023-24, the government and the Reserve Bank of India (RBI) expect India’s GDP to grow by 6.5 percent.

Reason for optimism?

The upgrade in growth forecasts comes despite April-June GDP growth of 7.8 percent broadly in line with the consensus estimate of 7.7 percent. However, economists who had expected weaker numbers for April and June were surprised.

“The robust momentum in domestic demand continues to be reflected in the GDP numbers, which have surprised to the upside for two consecutive quarters,” said Morgan Stanley’s Upasna Chachra and Bani Ganbhir, who expected growth of 7.4 percent.

“We expect resilience to hold and be strengthened by the confluence of favorable structural and cyclical factors. Stronger balance sheets from all economic actors and the government’s proactive supply-side response, which is embarking on structural reforms, should lay a firm foundation for a strong economy.” percent before),” they added.