GDP growth estimated at 7.3% for FY24

GDP growth estimated at 7.3% for FY24

Why in News?

National Statistical Office (NSO) recently released India’s GDP growth estimates for 2023-24 at 7.3% that is slightly more than 7.2% estimated for the previous year. Earlier to this the Reserve Bank of India (RBI) also projected its estimate at 7% growth for India. This clearly signifies that India’s GDP is likely to grow by 7.3% in Financial Year 2024.

The Whole Story

• The projected growth for FY24 is 8.9% which actually is a drop when compared to 16.9% in the preceding year.
• The government hopes for a GVA growth of 6.9% this year which is again lower than 7% of 2023.
• Economy experts and analysts expect the growth percentage to stay close to the 7% mark.
• RBI, by December, also elevated its forecast for FY24 because of the robust growth in high frequency indicators.
• Due to certain positive economic indicators, several economists revised their annual estimates upward.
• Also, the September quarter strong GDP figure projection of 7.6% year-on-year, followed by a 7.8% expansion in the previous quarter contributes in the opinion about growth in GDP. 

What is the First Advance Estimate (FAE)?

• The First Advance Estimate (FAE) is the government’s inaugural GDP estimate released in January.
• It uses high frequency indicators to draw provisional data using the benchmark indicator method.
• All the figures obtained are then compared with the preceding year figures and performance of high-frequency indicators is rated in the initial quarters of the new year.
• The figures like consumer inflation, the Index of Industrial Production, revised fiscal estimates and financial results from listed companies among other indicators are involved in this assessment.