Chennai, March 13,2023: Credit rating agency Acuite Ratings & Research on Monday reiterated its forecast of Indian gross domestic product (GDP) growth at 7 per cent for FY23.

In a report, Acuite said it is maintaining India’s GDP growth at 7 per cent for FY23 and 6 per cent for FY4.

The credit rating agency said India’s industrial activity rose to 5.2 per cent year-on-year (YoY) in January 23 from 4.7 per cent in December 22, marginally beating market consensus.

Sequential momentum in the index of industry production (IIP) was moderately strong at 0.8 per cent month-on-month (MoM) in January 23, building on the 5.7 per cent MoM expansion recorded in the previous month, and broadly in line with the average expansion of 0.7 per cent MoM usually seen in the month of January.

According to Acuite, the government’s strong capex disbursals, recovery in auto sales, and improving capacity utilization at a macro level ought to have played a supportive role.

However, weakening of growth impulses due to tightening of global financial conditions and persistent geopolitical uncertainty continue to be a matter of concern and has started to reflect through a weakness in manufacturing exports, Acuite said.

In addition, a subdued recovery in the pace of private capex along with expectations of a moderation in urban consumption pose concerns about the strength of the recovery in FY24, Acuite said.