The economic research department of the State Bank of India (SBI) has forecasted India’s gross domestic product (GDP) growth at 6.8 per cent in Q3 FY24 amid global economic complexity. The report added that it could hit 7 per cent on the back of likely downward revisions in Q3 FY23 estimates.
The report stated that the CLI Index (a basket of 41 leading indicators which includes parameters from almost all the sectors) based on monthly data shows a slight moderation in economic activity in Q3.
“Factoring the slight decline in economic activity in Q3 FY24, we estimate GDP should grow in the range of 6.7 to 6.9 per cent with a GVA growth of 6.6 per cent,” the SBI report stated.”
The report mentioned that the likelihood of the global economy exhibiting stronger-than-expected growth in 2024 has brightened in recent months, with risks broadly balanced. Accordingly, the International Monetary Fund (IMF) upgraded its global growth forecast to 3.1 per cent in 2024 and 3.2 per cent in 2025 in its January 24 world economic outlook.
On the flip side though, both the United Kingdom (UK) and Japan slipping into recession warrants a return to the drawing board, a situation exacerbated by Bundesbank hinting at stress factors driving the beleaguered German economy.
The joining chorus of countries from diverse localities (primarily the European Union) reflects the divergent fault lines economies from AEs to EMs are embracing as they come out of the pandemic era of quantitative easing and wrack caused by spiralling prices on consumers in the last two years
Global complexity also further gets clouded by the marked slowdown in China facing deflationary concerns now, a fallout of the property bubble amidst an overhang of debt among local governments that has slowed bank lending (despite cuts in key rates of late to spruce demand) and industrial enterprises profits dropping YoY, coupled with surging joblessness.
“The waning might of the mainland that has been battling tech and strategic isolation at the world stage does not augur well for industrial and commodity demands for a world order limping back to normalcy in the short run at least,” it added.
Talking about corporate India, the report mentioned that it has continued its robust performance buoyed by incrementally accelerating consumption patterns across the urban-rural landscape. Corporate results, as recorded from around 4,000 listed entities, for Q3FY24, show robust growth of more than 30 per cent in both earnings before interest, taxes, depreciation and amortisation (EBITDA) and profit after tax (PAT), while the top line grew by around 7 per cent as compared to Q3FY23.
Further, listed entities reported margin improvement, as reflected in results of around 3000 listed entities ex banking, financial services and insurance (BFSI), with EBITDA margin of 14.95 per cent, on an aggregate basis, during Q3 FY24 as compared to around 12 per cent during the same period the previous year.
Corporate gross value added (GVA), as measured by EBITDA plus employee expenses reported a strong growth of around 26 per cent in Q3FY24 as compared to Q3FY23, it added.
