India's Q4 FY24 GDP growth projected at 7.4%, full-year growth at 8%: SBI report

India is likely to have a GDP growth of 7.4% in its Q4 FY24 and an overall FY24 GDP growth of 8%, according to a report by SBI Research. The centre will release the GDP figures for the fourth quarter of the current fiscal along with provisional estimates for 2023-24 on Friday, May 31.

On the other hand, the Reserve Bank of India (RBI) projected the fourth quarter Real GDP growth for FY24 to be 7.3%. It estimated Q1 FY25 growth at 7.5% and a full-year FY25 to grow at 7.0%.

The SBI report noted that leading indicators depict a secular growth trend across urban and rural landscapes. “Passenger vehicle sales, airport passenger traffic, GST collection, credit card transactions, petroleum consumption and toll collection are all indicating improving urban economic momentum," the report said.

It also mentioned that the rural economy is gradually improving with 75% of indicators showing growth in March 2024, up from 56% in February and 60% in January. The economic momentum in rural areas can be estimated from higher diesel consumption and an uptick in two-wheeler sales.

Meanwhile, the GDP growth was highest in six quarters in the December quarter with an 8.4% surge, suggesting a positive economic trend and resilience in India’s financial terrain.

The report also highlighted the growth witnessed by 2,400 listed Indian companies in Q4 FY24, with their revenue scaling by 9%, and their EBITDA (Earnings Before Interest, taxes, Depreciation, and Amortization) increasing by 21%, compared to the nearly flat growth in the corresponding quarter in the previous year. However, PAT growth declined to 12% from 42% in the last two quarters on a YoY basis. The above-normal monsoon is beneficial for the rural economy as it promotes domestic supplies of pulses, oilseeds, and cereals.

Other key observations of the SBI report

The SBI report said that global growth remains strong with inflation ebbing slowly with tight employment conditions, despite braving adverse geopolitical and extreme weather situations.

The global headline inflation is likely to fall from an annual average of 6.8% in 2023, to 5.9% in FY24, it said. It will further ease to 4.5% in 2025 as per IMF estimates.