SBI Economist Foresees Resilient Q3 GDP Growth for India
A top economist from the State Bank of India (SBI), Dr. Soumya Kanti Ghosh, anticipates India's Gross Domestic Product (GDP) to grow between 6.7-6.9% during the third quarter (Q3) of FY24. In his report, Dr. Ghosh attributes this projection to a slight decline in economic activity during Q3, estimating a gross value added (GVA) growth of 6.6%.
The SBI Composite Leading Indicator (CLI) Index, comprising 41 leading indicators, reflects a modest moderation in economic activity during Q3. Dr. Ghosh's estimates are reinforced by the SBI-ANN (Artificial Neural Network) model, trained on quarterly GDP data from 2011Q4 to 2020Q4, demonstrating precise forecast performance.
Despite global uncertainties, consumer confidence in India has strengthened, driven by optimism about the economic situation and employment conditions. Enterprise surveys indicate robust business optimism, with corporate India showcasing over 30% growth in both EBIDTA and profit after tax (PAT) for Q3FY24.
Listed entities report improved margins, with an EBIDTA margin of 14.95% during Q3 FY24, compared to around 12% the previous year. Corporate Gross Value Added (GVA), measured by EBIDTA plus employee expenses, exhibits strong growth of around 26% in Q3FY24.
The agriculture sector faces challenges, with a 4.6% decline in the estimated production of major Kharif crops for 2023-24. Although the Rabi sowing season indicates a slight increase in overall acreage, concerns arise over the decline in the sown area under cereals by 6.5% from the previous year.
On a positive note, inland fish production has shown rapid growth, reaching 131.13 lakh tonnes in 2022-23. The fisheries sector, contributing about 1.07% of the total national GVA and 6.86% of agricultural GVA, could support agriculture and allied sector growth in FY24, according to Dr. Ghosh.
