New Delhi, Sept 21 (KNN) India Ratings and Research on Wednesday revised India's GDP growth estimate for FY24 to 6.2% from 5.9% projected earlier.

The rating agency has quoted sustained government capex, deleveraged balance sheet of corporates and banking sector, and the prospect of a new private corporate capex cycle.

It has however cautioned that the Indian economy faces challenges from slowing exports, which contracted during the April-July period amid global headwinds and deficient monsoon.

“Tighter financial conditions have led to rise in the interest rate/cost of capital, and industrial growth, especially manufacturing growth continues to be tepid,” the report said.

The Indian economy grew at 7.8% in the first quarter of the current fiscal year on higher government and private capital expenditure, and strong services growth.

“All these risks will continue to weigh and restrict India’s GDP growth to 6.2% in FY24 (FY23: 7.2%), and the quarterly GDP growth, which came in at 7.8% in 1QFY24, is slated to slow down sequentially in the remaining three quarters of FY24,” said Sunil Kumar Sinha, Principal Economist, India Ratings and Research.

While the Reserve Bank of India (RBI) is expecting the same, it estimates the overall FY24 GDP to come in at 6.5%.

RBI has forecast Q1FY24 real GDP growth at 7.8% and full-year growth at 6.5%.  (KNN Bureau)