BUDGET EXPECTATIONS: Lower GDP growth projection expected in FY 24 budget

17 Jan 2023 , 04:10 AM

It is expected that Budget for FY 24 will factor in a lower GDP growth rate for the Indian economy. Credit research agency ICRA estimates that GDP growth forecast in the budget for FY 24 will be at 6%. 

Globally, economic slowdown is likely to worsen in key economies such as USA and UK. This will also lower demand for exports from India in these economies. High inflation rate in India will have an adverse impact on real income of people. This is likely to have some adverse impact on consumption and demand in the economy. The prevailing high interest rate scenario will also have some adverse impact on investment and gross capital formation in the year.

GDP is the sum of Consumption, Investment, Government Expenditure and Net Exports (Exports – Imports). Higher Government expenditure may offset some of the slowdown in Consumption, Investment and Net Exports in FY 24. But GDP growth rate is still very likely to slow down. Budgetary forecast for GDP in the year will therefore be lower too.