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![India's 6.1% GDP growth in January-March quarter shouldn't have come as a surprise, JPMorgan says](https://image.cnbcfm.com/api/v1/image/107248996-16855856711685585669-29697025134-1080pnbcnews.jpg?v=1685593823&w=750&h=422&vtcrop=y)
JPMorgan elevated its 2024 financial forecast for India — however solely marginally — saying the nation’s progress can be affected by a slowdown in world progress momentum.
The funding financial institution raised its 2024 progress forecast from 5% to five.5%. The revision follows the most recent gross home product information this week which confirmed the Indian financial system accelerated 6.1% within the January to March quarter, a rise from 4.5% the earlier quarter.
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The financial system began the yr on a “very sturdy observe as progress got here in a lot quicker, or a lot increased, than what market consensus have been,” DBS Financial institution senior economist Radhika Rao stated.
The South Asian nation’s sturdy progress was pushed by a decide up in home demand for items and companies in addition to sturdy exports.
“Now we have been flagging the continued energy of India’s service exports and the way items exports have been additionally doing cyclically higher than had been anticipated,” JPMorgan stated in a observe.
There have been additionally “a number of pockets of upside surprises, together with manufacturing, development, and farm output … mounted capital funding progress has additionally fared higher,” Rao advised CNBC’s “Road Indicators Asia” on Thursday.
Economies which can be closely depending on commerce are shedding momentum, she stated, however these like India which have been targeted on “natural drivers” of progress are faring higher.
![India's economy started the year on a 'very strong' note, DBS Bank says](https://image.cnbcfm.com/api/v1/image/107249020-16855930981685593095-29698102243-1080pnbcnews.jpg?v=1685596352&w=750&h=422&vtcrop=y)
Nonetheless, JPMorgan nonetheless stays cautious on the nation’s progress prospects subsequent yr.
Though the federal government has introduced a lift in capex spending, it’ll take time for that to translate right into a broader non-public funding cycle.
Investments from India haven’t “moved very a lot” in the previous few years, stated Jahangir Aziz, chief of rising market economics at JPMorgan.
“Within the final six months, we have seen a perceptible drop of international direct investments the world over,” Aziz stated, including that FDI in each China and India have dipped.
“Non-public investments in India have basically flatlined … And public spending from the federal government’s investments have flatlined at 7% for the final 10 years,” he highlighted.
The funding financial institution additionally expects exports from India to lower as world progress slows with extra superior economies heading towards a recession.
“International progress momentum continues to be anticipated to gradual within the coming quarters and, domestically, the influence of financial coverage normalization can be felt with a lag,” JPMorgan stated.
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