GDP Growth Q4 FY24 - HDFC Bank
GDP Growth Q4 FY24 - HDFC Bank
GDP Growth Q4 FY24 - HDFC Bank
• For the full year, GDP growth stood at 8.2% versus 7% in the previous year and the 7.6% estimate
given in the second advance release (in February 2024). The full year GDP print was pushed up due to the
higher Q4 FY24 prints. Looking at the internals, growth was driven by fixed investments (grew by 9%)
while consumption growth remained low at 4%. Surprisingly, the residual component called
“discrepancies” rose sharply by 123%, raising the possibility of future data revisions.
• Nominal GDP growth moderated to 9.6% in FY24 (compared to 14.2% in FY23) – reducing its gap
with real GDP growth. This was as the deflator (nominal GDP/real GDP) fell to 1.3% versus 6.7% in
the previous year on the back of significantly lower WPI inflation (-0.7% in FY24). The lower deflator
seems to have distorted the internal sectoral growth as well. For instance, the deflator for the manufacturing
sector stood at -1.7%, in turn pushing up real manufacturing growth to 9.9% in FY24. To recall, real
growth = nominal growth – deflator.
• Relying on GVA for growth signals: For the full year, GVA growth rose to 7.2% in FY24 compared to
6.7% in FY23. This shows that, even after keeping aside the various statistical distortions, growth
momentum picked up pace in the last fiscal. The major drivers for growth included the manufacturing (at
9.9%) and construction (9.9%) sectors while agriculture growth was a drag. Service sector growth stood
at 7.6%,
• FY25 Outlook: Looking ahead, we expect FY25 GVA growth of 6.8-7.0%. In Q1 FY25, we could continue
to see the wedge between GDP and GVA to persist and remain high as government spending is expected
to be low. In terms of drivers for FY25, economic activity is expected to be supported by a recovery in
consumer demand, particularly in the rural sector as inflation stabilises and a normal monsoon supports
rural incomes. On investments, the government is expected to continue doing the heavy lifting although
we do expect a gradual pick up and broad basing in private capex as well. On the external front, goods
exports are expected to rise as global growth holds ground.
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Divergence between GDP and GVA: GDP higher than Discrepancies contributed 2.5 ppt to GDP in Q3 FY24
GVA by 150 bps led by higher net taxes
Source: CEIC, MOSPI, HDFC Bank Source: CEIC, MOSPI, HDFC Bank
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