Barclays has significantly revised its GDP growth forecast for India upwards, reflecting the country's impressive economic performance in recent quarters. Following the release of strong GDP data for the October-December 2023 period, Barclays has increased its growth projection for the entire fiscal year 2023-24 to 7.8%, representing a 110 basis point jump from their previous estimate.
This upward revision is attributed to the robust growth momentum observed throughout the first three quarters of 2023-24. With the current average growth hovering around 8.4%, Barclays acknowledges the potential for upward revisions in the future.
The bank's optimism extends into the next fiscal year, with their forecast for 2024-25 also experiencing a 50 basis point revision upwards, reaching 7%. This positive outlook stems from India's strong economic performance, which is expected to continue exceeding the growth rates of other major economies, solidifying its position as the world's fastest-growing major economy.
Barclays acknowledges the potential for a further boost to India's growth trajectory. With the implementation of the right policy mix, the bank believes India has the potential to achieve a GDP growth rate closer to 8% by the end of the decade, potentially becoming the largest contributor to global growth.
This revised forecast by Barclays aligns with the Indian government's own revised projection of 7.6% growth for the current fiscal year, surpassing their earlier estimate of 7.3%. This positive economic outlook strengthens India's position as a global leader in economic growth and provides a significant boost to Prime Minister Narendra Modi's campaign as he gears up for the upcoming elections.