However, it kept its forecast for CY24 unchanged at 6.3 per cent.
“Going forward, we expect the strong trend in services exports and lower merchandise imports to continue, and expect a net export boost in CY23, with real exports growth above 4 per cent with flat real imports growth in CY23. There are pockets of strength in services demand — services PMI clocked a 13-year high of 62, domestic air passenger traffic exceeded pre-pandemic levels and services exports have held up despite a slowdown in global growth,” it said in a release.
However, the private sector investment demand has remained muted as represented by a slowdown in industrial credit growth led by large industries in recent months, although the sequential growth in government expenditure is expected to come in stronger than previous expectations, given spending trends in January and February.
“In YoY terms, our Q2-Q4 CY23 GDP growth forecast is 6.5 per cent, 5.9 per cent, and 8.1 per cent, respectively,” it added.
“For all high-frequency indicators, which we monitor, the momentum was maintained in Q4 (January- March), [and] the war on inflation is not over yet; we have to remain alert. There is no room for complacency. We will have to see how the El Nino factor plays out,” Das had said at an industry body event.
“India’s economy — the largest in the (South Asian) region — is expected to expand by 5.8 per cent in 2023 and 6.7 per cent in 2024, supported by resilient domestic demand. As the (South Asian) region is highly vulnerable to extreme climate conditions, potential droughts and floods also pose a significant risk to the economic outlook,” it had noted.