J.P. Morgan raised its forecast for India's annual growth by 50 basis points to 5.5% for fiscal 2024, but warned that a global economic slowdown and tighter financial conditions will still drag the economy.

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The change comes after growth in India's gross domestic product (GDP) accelerated to 6.1% in the March quarter, government data showed, boosted by government and private capital spending even as private consumption remained sluggish.

The economy also grew at a better-than-expected 7.2% for fiscal 2023."Global growth momentum is still expected to slow in the coming quarters and, domestically, the impact of monetary policy normalisation will be felt with a lag," economists led by Sajjid Z Chinoy said.

The Indian government revised its full-year growth estimate for the current financial year to 7.2% from 7% on Wednesday, above the Reserve Bank of India's estimate of 7%.

India's economy grew 9.1% in fiscal 2022. The brokerage added the growth could see upsides if the central government can pull off the "very strong increase" in budgeted capex for fiscal 2024 and convince the states to do the same.

However, the economy could take a hit if the El Nino phenomenon impacts this year's monsoon, it added.

The Wall Street Bank attributed the better-than-expected March-quarter GDP to higher growth in exports, adding that India stood to benefit, as a commodity importer, "through positive terms-of-trade impulses from lower commodities."