India Real GDP - How Did We Get It So Wrong In FY24?

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.In this note, we discuss – with the benefit of hindsight – the possible factors explaining better-than-expected real GDP growth in FY24. In our view, four factors explain a large part of this outperformance:lower deflator pushing real growth higher, even when nominal growth moderated; no fiscal drag as fiscal spending, led by capex, grew decently in FY24, amid deficit consolidation; strong growth in credit, pushing the credit-to-GDP growth ratio to a 17-year high; and a 47-year low household net financial savings in FY23, leading to an unfavorable base for household spending in FY24, which was exaggerated by a likely pick-up in household net financial savings. .As we enter FY25, one of these factors will reverse (deflator), some will moderate (fiscal spending and credit growth) and the last one (household spending growth) will improve. Accordingly, it explains the unanimous projection of a moderation in real GDP growth to 6.5-7.2% in FY25 from 8.2% in FY24. In any case, India’s economic growth in the postpandemic period (FY21-FY24), especially considering a modest fiscal and monetary stimulus, has not been particularly weak compared to other major economies, and it is unlikely to change in FY25..Click on the attachment to read the full report:.Indian PSUs – Back With A Vengeance: Motilal Oswal.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

India Real GDP - How Did We Get It So Wrong In FY24?

Some lessons from the recent past for FY25

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