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Rating agency Crisil had said on March 16 that according to consensus estimates, the economy is likely to register a slower growth of 6% in the next fiscal. The agency also sees the economy averaging 6.8% growth over the next five fiscal years.
CRISIL further said that it expects double-digit growth in corporate revenue again in the next financial year. The National Statistical Organization (NSO) had pegged a growth of 7% for the outgoing fiscal – an ambitious number considered by some analysts as for the economy to close the year with a 7% growth, it would need to grow by more than 4.5%. to increase at the rate of % in the current quarter of FY2023, which looks ambitious.
In his annual growth forecast, Crisil Chief Economist DK Joshi said a complex interplay of geopolitical events, extremely high inflation – and sharp rate hikes to counter it – have turned the global environment gloomy.
On the domestic front, he said, the peak impact of the rate hike – 250 basis points from May 2022, which has pushed interest rates above pre-COVID levels – will play out more in the next fiscal.
Consumer inflation is expected to average 5% in FY24 from 6.8% in FY23 due to a higher-base effect and some softening in crude oil and commodity prices. However, a good rabi harvest should help ease food inflation, while a slowing economy should ease core inflation. Mr Joshi said with the ongoing heat wave and the World Meteorological Organisation’s prediction that an El Nino warming event is likely over the next few months, risks to inflation are tilted to the upside.
The agency’s Managing Director Amish Mehta joined them in saying the country’s medium-term growth prospects are bright. Over the next five fiscal years, “we expect GDP to grow at 6.8% annually”, with capital and productivity growth expected to increase by 6% in the next fiscal year.
He further added that it is also good to see that Capex has a growing sustainability footprint. Currently, around 9% of infrastructure and industrial capex is green. “We see this number rising to 15% by this financial year”.
Joshi further said that for India Inc, revenue growth is expected to touch double digits in FY24 despite a global slowdown and hike in interest rates, shows an analysis of 748 listed companies from FY2011. This will be driven by 10-12% growth in revenue from non-commodity segments even as commodity prices remain benign.