India may peg nominal GDP growth at about 11% in 2023/24 budget- sources

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India may peg nominal GDP growth at about 11% in 2023/24 budget- sources
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India is likely to peg its nominal gross domestic product (GDP) growth at around 11% in the annual budget next week, marking a slowdown from its estimate for the current fiscal year due to the prospect of weak exports, two government officials said.

Nominal GDP growth — which includes inflation and is the benchmark used to estimate tax collections — could be pressured by suppressed external demand next year due to a likely U.S. recession, said the sources, who declined to be named as discussions are not yet public.With nominal GDP of 10.6%-11%, India's gross tax collection growth rate is likely to be around 8% in 2023/24, compared with 14.5% in the current year, due to base effect, said Gaura Sengupta, an economist at IDFC First Bank.

India's CAD was 4.4% of GDP in the July-September quarter, higher than 2.2% a quarter ago and 1.3% a year ago, as rising commodity prices and a weak rupee increased the trade gap. The Economic Survey is the government's review of how the economy fared in the past year and precedes the budget presentation by a day. The budget is due on Feb. 1.

India aims to achieve a fiscal deficit of 4.5% of GDP by 2025/26. The current year's fiscal deficit target is pegged at 6.4%.

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