A senior economist at the State Bank of India (SBI) has forecast that India's gross domestic product (GDP) will grow by 6.7 to 6.9 percent in the third quarter of fiscal 2023-24. In the latest report, Soumya Kanti Ghosh, Group Chief Economic Advisor, said: “Taking into account the slight decline in economic activity in the third quarter of fiscal 2024, we expect GDP to grow at a gross value added in the range of 6.7 to 6.9 percent expected to grow (GVA growth of 6.6 percent.”
The SBI Composite Leading Indicator (CLI) Index, which includes 41 leading indicators across various sectors, points to a slight slowdown in economic activity in the third quarter. Ghosh points out that these estimates are consistent with the SBI-ANN (Artificial Neural Network) model, which includes 30 high-frequency indicators. The ANN model was trained on quarterly GDP data from 2011Q4 to 2020Q4 and demonstrated accurate forecasting performance during the training period.
In contrast to the prevailing global pessimism, consumer confidence in India has continued to strengthen, largely due to optimism about the overall economic and employment outlook. Ghosh noted that various business surveys also indicate a significant increase in business optimism.
Corporate India has maintained its impressive performance, driven by a noticeable acceleration in consumption trends in urban and rural areas. Corporate results of around 4,000 listed companies for the third quarter of FY24 show robust growth, with EBIDTA and profit after tax (PAT) both rising by more than 30 percent, while revenue increased by 30 percent compared to the third quarter of FY2023 around 7 percent recorded SBI report.
Additionally, there has been a significant improvement in margins reported by listed companies, as reflected in the results of about 3,000 listed companies, excluding the banking, financial services and insurance (BFSI) sector. The aggregate EBIDTA margin was 14.95 percent in the third quarter of fiscal 2024, compared to around 12 percent in the same period last year.
Ghosh highlighted that the company's Gross Value Added (GVA), as measured by EBIDTA plus employee expenses, registered a robust growth of around 26 per cent in the third quarter of FY24 compared to the third quarter of FY23.
According to the initial advance estimates, the forecast production of key kharif crops for 2023-24 is 148.5 million tonnes (MMT), down about 4.6 per cent over FY23.
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“While the sowing season of Rabi crops that ended on February 23 indicates a slight increase in the total area under cultivation compared to last year. However, there were concerns over the grain sown area, which registered a decline of 6.5 per cent year-on-year,” Ghosh said.
If Rabi production fails to make up for the Kharif deficit, agriculture could witness some slowdown, leading to a decline in value addition in this sector. However, inland fish production increased rapidly from 2014-15 to 2022-23 and reached 131.13 lakh tonnes in 2022-23. The share of the fisheries sector in the total national GVA is about 1.07 percent and in the agricultural GVA is about 6.86 percent.
This growth in the fisheries sector could support the overall development of agriculture and allied sectors in FY24, Ghosh stated in the report.
