Based on rating agency ICRA, a healthy increase in rabi (winter) crop output, a pick-up in year-over-year (YoY) growth of high-frequency indicators in January and February, strong service demand, and a moderation in commodity prices are expected to boost India's gross domestic product (GDP) growth to 4.5–5% in the fourth quarter of fiscal 2022–23 (Q4 FY23) from 4.4% in Q3.

Crop yields may suffer as a result of the unseasonal rainfall in mid-March.

ICRA anticipates that throughout FY24, consumer sentiment will improve, which bodes positively for consumption demand, but it will still be uneven.

El Nino conditions could reappear, which could have a negative impact on crop production, rural demand, and food inflation, according to ICRA.

ICRA predicts that the GDP growth would slow to 6% in FY24 from the projected 6.9% in FY23.

In comparison to the 9.9% growth experienced in Q3 FY23, the ICRA business activity monitor reported a better YoY expansion of 11.7% in January–February FY23.

Although the index significantly increased from the pre-COVID levels of January–February 2020 by 15.3%, this was less than the 18.2% expansion witnessed in Q3 FY23.

ICRA anticipates two major risks that could prevent the consumption increase. The first is a result of persistently high inflation. Second, crop damage caused by a heat wave, excessive rainfall outside of the season, or a monsoon drought might potentially have an impact on farm revenues and rural spending.