CHENNAI: Acuite Ratings & Research, a credit rating agency, reaffirmed its prediction of 7% GDP growth for India in FY23 on Monday. Acuite stated in a report that it will keep India's GDP growth at 7% for FY23 and 6% for FY4.

According to the credit rating agency, India's industrial activity increased to 5.2% year-over-year in January 23 from 4.7% in December 22, narrowly above market expectations.

Building on the 5.7% MoM expansion recorded in the previous month and substantially in line with the typical expansion of 0.7% MoM normally seen in the month of January, sequential momentum in the index of industry production (IIP) was reasonably robust at 0.8% month-on-month (MoM) in January 23.

Acuite contends that supportive factors should have included the government's substantial capital expenditures, a rebound in auto sales, and increased capacity utilisation on a broad scale.

The tightening of global financial conditions and ongoing geopolitical instability, however, continue to be a source of concern and have begun to show through a decline in manufacturing exports, Acuite said.

Concerns regarding the strength of the rebound in FY24 are further raised by the slow rate of private capex recovery and projections of a reduction in urban spending, Acuite said.

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