The economy is likely to log in a tepid 6 percent growth next fiscal, in line with the consensus estimates, rating agency Crisil said on Thursday.

The agency also sees the economy averaging a growth rate of 6.8 percent over the next five fiscals. Crisil further said it expects the corporate revenue to log in double-digit rise again next fiscal.

The National Statistical Organisation (NSO) had penciled in a 7 percent growth for the outgoing fiscal — something most analysts consider to be an ambitious number because for the economy to close the year with 7 percent growth, it will have to grow at over 4.5 percent in the present quarter of fiscal 2023, which looks ambitious.

In its annual growth forecast, Crisil chief economist D K Joshi said a complex interplay of geopolitical events, stubbornly high inflation — and sharp rate hikes to counter that — have turned the global environment gloomier. On the domestic front, he said, the peak impact of the rate hikes — 250 basis points since May 2022, which has pushed interest rates above pre-Covid levels — will play out more in the next fiscal.

Good rabi harvest would help cool food inflation

Consumer inflation is expected to moderate to 5 percent on average in fiscal 2024 from 6.8 percent in fiscal 2023, owing to the high-base effect and some softening of crude and commodity prices. However, a good rabi harvest would help cool food inflation, while the slowing economy should moderate core inflation.

The risks to inflation are tilted upward, given the ongoing heat wave and the World Meteorological Organization’s prediction that an El Niño warming event is likely over the next couple of months, Joshi said.
Joining him, Amish Mehta, the agency’s managing director, said the country’s medium-term growth prospects are healthier. Over the next five fiscals, “we expect GDP to grow at 6.8 percent annually”, with the next fiscal delivering 6 percent, driven by capital and productivity increases.

Increasing sustainability footprint of capex

He further said what is also good to see is the increasing sustainability footprint of capex. At present, nearly 9 percent of the infrastructure and industrial capex is green. “We see this number rising to 15 percent” by this fiscal.

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Joshi further said for India Inc, revenue growth is expected to touch double-digits in fiscal 2024 despite a global slowdown and interest rate hikes, an analysis of 748 listed companies from fiscal 2011 onwards shows. This will be driven by a 10-12 percent growth in revenue for the non-commodity sectors, even as commodity prices remain benign.

(Source-PTI)