Who wrote this article?

Deepak Shenoy, Capitalmind's research team.

What does the "Key Risks" section say?

Global recession deepening, particularly the US Crude oil spike above $100/bbl (India imports ~85% of needs) Geopolitical escalation in West Asia Domestic politics (election year uncertainty)

India Macro Outlook 2024

India Macro Outlook 2024 – Navigating Uncertainty

A deep look at India's macroeconomic landscape for 2024, covering GDP growth, inflation, currency, and what it means for equity investors.

15 Jan 2024Deepak Shenoy12 min read

Quick Facts

What is "India Macro Outlook 2024 – Navigating Uncertainty" about?: A deep look at India's macroeconomic landscape for 2024, covering GDP growth, inflation, currency, and what it means for equity investors.
What category is this article in?: Macro Research
Who wrote this article?: Deepak Shenoy, Capitalmind's research team.
When was this article published?: Published 15 January 2024.
How long does this article take to read?: 12 min read
What topics does this article cover?: macro, india, gdp, rbi
What does the "Executive Summary" section say?: India enters 2024 from a position of relative strength. GDP growth is expected to stay in the 6.5–7% range, inflation is moderating, and the RBI has room to ease policy rates in H2 2024. However, global headwinds — particularly US recession risk and China's structural slowdown — pose meaningful downside risks.
What does the "GDP Growth Outlook" section say?: Our base case for India's GDP growth in FY2024-25 is 6.8%, with upside risk from:
What does the "Inflation and RBI Policy" section say?: CPI inflation is expected to average 4.5–5.0% in FY25, within the RBI's 2–6% target band. We expect the first rate cut in Q3 2024 (Oct–Dec), with a total of 50–75 bps of cuts through FY25.
What does the "Equity Market Implications" section say?: A rate cut cycle is historically positive for:
What does the "Key Risks" section say?: Global recession deepening, particularly the US Crude oil spike above $100/bbl (India imports ~85% of needs) Geopolitical escalation in West Asia Domestic politics (election year uncertainty)

Executive Summary

India enters 2024 from a position of relative strength. GDP growth is expected to stay in the 6.5–7% range, inflation is moderating, and the RBI has room to ease policy rates in H2 2024. However, global headwinds — particularly US recession risk and China’s structural slowdown — pose meaningful downside risks.

GDP Growth Outlook

Our base case for India’s GDP growth in FY2024-25 is 6.8%, with upside risk from:

Strong domestic consumption
Government capex momentum (₹11.1 lakh crore budgeted)
Manufacturing shift via PLI schemes

The downside risk comes primarily from a prolonged global slowdown dampening exports and IT services revenue.

Inflation and RBI Policy

CPI inflation is expected to average 4.5–5.0% in FY25, within the RBI’s 2–6% target band. We expect the first rate cut in Q3 2024 (Oct–Dec), with a total of 50–75 bps of cuts through FY25.

Equity Market Implications

A rate cut cycle is historically positive for:

Banks and NBFCs — Lower funding costs expand NIMs
Real Estate — Affordability improves, volume picks up
Consumer durables — Discretionary spending gets a boost

Our view: Stay overweight India equities. Any dip driven by global risk-off is a buying opportunity.

Key Risks

Global recession deepening, particularly the US
Crude oil spike above $100/bbl (India imports ~85% of needs)
Geopolitical escalation in West Asia
Domestic politics (election year uncertainty)

This analysis is for educational purposes only and should not be construed as investment advice.