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regular-article-logo Tuesday, 16 April 2024

Growth for the fiscal to comfortably exceed projection of 6.5 per cent: Finance ministry

In its half-yearly review of the economy, the ministry said high-frequency indicators for October and November point to robust economic activity in the third quarter of 2023-24, which is likely to continue in the fourth quarter as well

Our Special Correspondent New Delhi Published 30.12.23, 11:41 AM
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The finance ministry on Friday said growth for the fiscal will comfortably exceed its projection of 6.5 per cent — on the back of a strong growth of 7.6 per cent in the second quarter.

In its half-yearly review of the economy, the ministry said high-frequency indicators for October and November point to robust economic activity in the third quarter of 2023-24, which is likely to continue in the fourth quarter as well.

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The government’s assertion comes in the wake of the RBI’s revision of its growth forecast for the third quarter (October-December) to 6.5 per cent at the monetary policy meet in early December. Back in October, the RBI had predicted a Q3 growth of 6 per cent.

The central bank has also revised upwards its forecast for the fourth quarter to 6 per cent from 5.7 per cent.

The apex bank has revised upwards its forecast for the fiscal to 7 per cent from 6.5 per cent on the back of strong growth in the second quarter.

HFIs (high-frequency indicators) in October and November reflect robust economic activity with PMI Manufacturing and Services remaining in the expansionary zone in October and November.

October imprints of IIP and the index of eight core industries also highlight sustained growth in manufacturing activity.

Downside risks to growth arise from smouldering inflationary pressures in advanced countries and supply-chain disruptions re-emerging from persistent geopolitical stress, while geopolitics is an independent source of risk in itself, the economic review said.

However, India’s domestic economic momentum and stability, low-to-moderate input cost pressures and anticipated policy continuity are significant buffers against those risks, it said.

Real GDP grew by a healthy 7.7 per cent in the first half of 2023-24, following a 7.6 per cent growth in the second quarter ended September 2023.

The urban component has strengthened consumption, while rural demand is beginning to pick up, it said, adding, the government capex has increased the investment rate while private investment is showing promise.

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