Mumbai - The Indian GDP may surpass the latest Reserve Bank of India projections for the first quarter of the current financial year (Q1FY24) as per a latest report released by credit rating agency, ICRA. In its last policy, the RBI Monetary Policy Committee (MPC) had left its growth forecast unchanged at 8.0% for the first quarter while ICRA is projecting a 8.5% growth in this period. The reason? As many as 11 of the 14 high-frequency indicators pertaining to the services sector recorded a YoY growth in Q1 FY2024.

“Economic activity in Q1 FY2024 was boosted by a continued catch-up in services demand and improved investment activity, particularly a welcome front-loading in Government capital expenditure. Moreover, sharply lower prices of various commodities on a YoY basis supported margins in some sectors,” said Aditi Nayar, Chief Economist, Head-Research & Outreach, ICRA.

The report also states that the GVA (gross value added) growth is seen at 8.1% in Q1 FY2024 (+6.5% in Q4 FY2023), driven by the recovery in the services sector (+9.7% vs. +6.9%), even as improved margins are likely to have shielded the industry (+7.3% vs. +6.3%) from weak external demand, with a relatively lower growth foreseen in agriculture (+4.0% vs. +5.5%).