India's Q3FY24 GDP to grow 6.7% � 6.9%: SBI

Chennai, Feb 28 (IANS) India’s Gross Domestic Product (GDP) should grow in the region of 6.7-6.9 per cent during the third quarter (Q3) of FY24, said a top economist with the State Bank of India (SBI).

In his latest report Dr. Soumya Kanti Ghosh, Group Chief Economic Advisor said, “Factoring the slight decline in economic activity in Q3 FY24, we estimate that the GDP should grow in the range of 6.7-6.9 per cent with a gross value added (GVA) growth of 6.6 per cent.”

The SBI Composite Leading Indicator (CLI) Index (a basket of 41 leading indicators which includes parameters from almost all the sectors) based on monthly data shows a slight moderation in economic activity in Q3.

According to Ghosh, the estimates are corroborated with the in-house developed SBI-ANN (Artificial Neural Network) model, with 30 high-frequency indicators.

The ANN has been trained for the quarterly GDP data from 2011Q4 to 2020Q4 and the in-sample forecast performance of the model in the training period has been precise.

As a counter narrative to the global gloom, consumer confidence has strengthened further in India, driven chiefly by optimism about the general economic situation and employment conditions.

Various enterprise surveys also point towards strong business optimism, Ghosh said.

Corporate India has continued its robust performance buoyed by incrementally accelerating consumption patterns across the urban-rural landscape.

Corporate results, as recorded from around 4,000 listed entities, for Q3FY24, shows robust growth of more than 30 per cent in both EBIDTA (earnings before interest, taxes, depreciation and amortisation) and profit after tax (PAT), while top line grew by around 7 per cent as compared to Q3FY23, the report said.

Further, listed entities reported improvement in margin, as reflected in results of around 3,000 listed entities ex-BFSI, with EBIDTA margin of 14.95 per cent, on aggregate basis, during Q3 FY24 as compared to around 12 per cent during the same period the previous year.

Corporate GVA, as measured by EBIDTA plus employee expenses, reported a strong growth of around 26 per cent in Q3FY24 as compared to Q3FY23, Ghosh said.

As per First Advance Estimates, the estimated production of major Kharif crops for 2023-24 is 148.5 million metric ton (MMT), a decline of about 4.6 per cent from FY23.

“While, the sowing season for Rabi crops that concluded on February 23, indicates a slight increase in overall acreage compared to the previous year. However, concerns arose over the sown area under cereals, which saw a decline of 6.5 per cent from the previous year,” Ghosh said.

While agriculture may see some moderation if the Rabi output does not offset the Kharif shortfall, value added in agriculture will decline.

The inland fish production has shown a rapid growth from 2014-15 to 2022-23 and reached 131.13 lakh tonnes in 2022-23.

The share of fisheries sector constitutes about 1.07 per cent of the total national GVA and 6.86 per cent of agricultural GVA.

So, this might support the agriculture and allied sector growth in FY24, Ghosh said.