Mumbai: The economy is likely to log in a tepid six 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 that it expects the corporate revenue to log in double-digit rise again next fiscal.
The National Statistical Organisation (NSO) had pencilled in seven percent growth for the outgoing fiscal which is considered to be an ambitious number by analysts because for the economy to close the year with seven percent growth, it will have to grow at over 4.5 percent in the present quarter of fiscal 2023.
In its annual growth forecast, Crisil chief economist D K Joshi said that 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, Joshi said, "the peak impact of the rate hikes by 250 basis points since May 2022, which has pushed interest rates above pre-Covid levels will play out more in the next fiscal."
Consumer inflation is expected to moderate to five percent on average in fiscal 2024 from 6.8 percent in fiscal 2023, owing to high-base effect and some softening of crude and commodity prices. The risks to inflation are tilted upward, given the ongoing heat wave and the World Meteorological Organization's prediction that an El Ni o warming event is likely over the next couple of months, Joshi said.
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."
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 six percent, driven by capital and productivity increases.
He further said, "what is also good to see is the increasing sustainability footprint of capex. At present, nearly nine percent of the infrastructure and industrial capex is green. "We see this number rising to 15 percent by this fiscal," he added.
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