India's GDP growth may cross 7 percent this year, says NCAER in its Monthly Economic Review for April

The Indian economy has continued to do well during the last two months and the forecast of an above-normal monsoon augurs well for the immediate future, NCAER said in its Monthly Economic Review for April.

A range of high-frequency indicators reveal the resilience of the domestic economy with the Purchasing Managers’ Index (PMI) for manufacturing at a 16-year high and UPI, the leading digital payments system, touching the highest volume since its inception in 2016.

In the report, NCAER said while PMI for manufacturing increased to 59.6 in March, it remained robust for services too, increasing to 61.2, showing signs of expansion of the economy.

Goods and Services Tax (GST) collections reached a value of Rs. 1.8 lakh crore in March 2024, the second best since its rollout in 2017, while UPI recorded 13.4 billion transactions (in volume) in March 2024, the highest ever since its introduction with a growth of 55.3 percent on a year-over-year basis.

“These high-frequency indicators, coupled with a more benign global outlook projected by the IMF and WTO bode well for the Indian economy during the current year,” said NCAER Director General Poonam Gupta.

The IMF has projected a resilient global economic outlook in its recent publication of World Economic Outlook. Indicating soft landing, they have upgraded global growth rate to 3.2 percent for this year and for next year.

Simultaneously, the World Trade Organization (WTO) has, projected that the world merchandise trade volume will grow by 2.6 percent in 2024, following a 1.2 percent decline in 2023.

“Projected acceleration in both global growth and trade volumes as well as forecast of an above normal monsoon indicate that the Indian economy can again attain growth rates higher than 7 percent during the current fiscal year,” Gupta said.

According to the report, Consumer Price Index (CPI) headline inflation was down to 4.9 percent in March from 5.1 percent in February while core inflation came down to 3.2 percent during the same period.

The report said employment indicators again showed mixed trends with an increase in the number of net new subscribers under the Employees' Provident Fund Organisation (EPFO) on a year-over-year basis. However, the overall online hiring activities as per the Naukri JobSpeak Index, moderated year-over-year.