Analysts' increase in GDP estimates for the next fiscal year

Mumbai: Rating agencies and economists have become optimistic about the economic growth rate for the next financial year after the third quarter of the current financial year's gross domestic product (GDP) numbers were encouraging and are raising their estimates.

In a report issued by the State Bank of India, India's economic growth rate for the next financial year has been estimated at eight percent.

The Chief Economist of Bank of Baroda has raised the GDP estimate to 7.80 percent from 6.80 percent earlier due to increase in private investments in the country and expectation of high consumption demand.

Citibank has also increased its estimate from 6.50 percent to 6.80 percent.

However, the brokerage house has expected the economic growth rate to remain below 6 percent for the next financial year, citing persistent external threats and some fiscal challenges facing the country.

Analysts have been surprised by the economic growth rate of 8.40 percent in the third quarter of the current financial year, which was higher than expected.

Considering that January and February activity in the manufacturing and service sector is high, the GDP numbers of the last quarter of the current financial year are also expected to be encouraging.

Despite the relatively high interest rate, with the GDP numbers increasing, it is being expressed that the Reserve Bank will not increase the repo rate in the next meeting.

Inflation in the country, especially food inflation, is still high.