India’s Gross Domestic Product (GDP) is expected to record growth of 8.5 percent in first quarter (April-June) of fiscal 2023-24, compared to 6.1 percent in corresponding quarter of previous fiscal, according to a report of rating agency ICRA on Monday, August 24.
The report said that first quarter GDP growth faced downward pressure due to unseasonal heavy rains in some regions of the country, weak external demand and the lagged effects of monetary tightening.
But growth in the quarter was due to a continued recovery in service demand, increased investment activity and reduced commodity prices, enhancing sectoral margins.
Factors such as erratic rainfall, reduced differentials in commodity prices compared to the previous year and a potential slowdown in government capital expenditure as elections approach are identified as potential limiting factors.
The rating agency however maintained a conservative GDP growth forecast of 6 percent for entire fiscal of 2023-24, lower than 6.5 percent forecast of central banker, Reserve Bank of India (RBI).