regular-article-logo Wednesday, 31 May 2023

Economy likely to log in a tepid 6 per cent growth next fiscal: Crisil

The agency also said it expects the corporate revenue to log in double-digit rise again next fiscal

PTI Mumbai Published 16.03.23, 01:51 PM
Representational image.

Representational image. Shutterstock

The economy is likely to log in a tepid 6 per cent growth next fiscal, in line with the consensus estimates, rating agency Crisil said on Thursday.

The agency also sees the economy averaging a growth rate of 6.8 per cent over the next five fiscals.


Crisil further said it expects the corporate revenue to log in double-digit rise again next fiscal.

The National Statistical Organisation (NSO) had pencilled in a 7 per cent growth for the outgoing fiscal -- something most analysts consider to be an ambitious number because for the economy to close the year with 7 per cent growth, it will have to grow at over 4.5 per cent in the present quarter of fiscal 2023, which looks ambitious.

In its annul growth forecast, Crisil chief economist D K Joshi said a complex interplay of geopolitical events, stubbornly high inflation -- and sharp rate hikes to counter that -- have turned the global environment gloomier.

On the domestic front, he said, the peak impact of the rate hikes -- 250 basis points since May 2022, which has pushed interest rates above pre-Covid levels — will play out more in the next fiscal.

Consumer inflation is expected to moderate to 5 per cent on average in fiscal 2024 from 6.8 per cent in fiscal 2023, owing to high-base effect and some softening of crude and commodity prices.

However, a good rabi harvest would help cool food inflation, while the slowing economy should moderate core inflation.

The risks to inflation are tilted upward, given the ongoing heat wave and the World Meteorological Organization's prediction that an El Niño warming event is likely over the next couple of months, Joshi said.

Joining him, Amish Mehta, the agency's managing director, said the country's medium-term growth prospects are healthier. Over the next five fiscals, "we expect GDP to grow at 6.8 per cent annually", with the next fiscal delivering 6 per cent, driven by capital and productivity increases.

He further said what is also good to see is the increasing sustainability footprint of capex. At present, nearly 9 per cent of the infrastructure and industrial capex is green. "We see this number rising to 15 per cent" by this fiscal.

Joshi further said for India Inc, revenue growth is expected to touch double-digits in fiscal 2024 despite a global slowdown and interest rate hikes, an analysis of 748 listed companies from fiscal 2011 onwards shows. This will be driven by a 10-12 per cent growth in revenue for the non-commodity sectors, even as commodity prices remain benign.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.

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