Bengaluru: India reported an economic growth of 6.3% in its July-September quarter, slower than the 13.5% growth reported in the previous three months, as Asia’s third largest economy recovers from distortions caused by the COVID-19 lockdown. Faded.
Government capital expenditure increased by more than 40% during the quarter as the federal government increased spending on infrastructure ranging from roads to railways, according to official data on Wednesday.
India’s growth rate for the second quarter of the 2022/23 fiscal year was above the 6.2% forecast by economists in a Reuters poll.
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Madhavi Arora, Principal Economist, MK Global Financial Services, Mumbai
“GVA (gross value added) growth slowed as expected at 5.6% in the second quarter, led by growth in the services sector, while manufacturing was a big drag.
“Going forward, even as the recovery in domestic economic activity is still not broad-based, prolonged global drag, shrinking corporate profitability, demand-crippling monetary policies and diminishing global growth prospects weigh on output .
“This will put pressure on domestic growth, which still lacks the next lever of secular growth. We see an increasing risk to our 7% growth forecast for FY23.
Sujan Hazra, Chief Economist, Anand Rathi, Mumbai
“GDP growth was expected to decelerate in the latest quarter due to both an asymmetric base effect and a sharp slowdown in exports. We expect the growth slowdown to continue for the rest of the current financial year.
“Services on the supply side and investment on the demand side will continue to be the main drivers of growth, while industry and consumption plus net exports will be the main drag.
“Despite the decline, we expect India’s GDP growth to be around 7% during the current fiscal and 6-6.5% in the next fiscal. The tight bias of monetary and fiscal consolidation will continue in India during the current year. Both policies are likely to be neutral next year as inflation and growth cool down.
Suvodeep Rakshit, Senior Economist, Kotak Institutional Equities, Mumbai
“GDP growth of 6.3% in 2QFY23 was in line with our expectation of 6.2%. Internals indicate a much weaker growth in the industrial sector, led by manufacturing while services sector growth has been steady given improvements in connectivity-based services.
Aditi Nayar, Chief Economist, ICRA, Gurgaon
“GDP growth of 6.3% in Q2 FY2023 was similar to our estimate of 6.5%, even as GVA growth of 5.6% beat our forecast (6.3%) by a wide margin, led by This was reflected in an unexpected contraction in the manufacturing sector. Impact of higher input prices on margins in some sectors.
“We are retaining our forecast for real GDP growth for FY2023 at 7.2%, although a deepening of the external slowdown remains a risk.”
Sakshi Gupta, Principal Economist, HDFC Bank, Gurugram
“As expected, services activity was the key driver of growth, while manufacturing GDP contracted. On the demand side, the share of private consumption in GDP fell – a sign of the fragility of consumption seen in Q1, as suppressed The demand side effect faded and elevated inflation hurt consumer spending.
“Going forward, both export growth and consumption could present downside risks to the GDP outlook. We expect H2 FY23 growth to be between 4% and 4.5% and full year growth to be at 6.8%. For FY24, the growth rate is expected to exceed 6% due to increasing global headwinds.
“This GDP print does not change our view that the Reserve Bank of India (RBI) may hike rates by 35 bps in the December meeting to take the policy rate to 6.25%.”
Garima Kapoor, Economist, Institutional Equities, Elara Capitals, Mumbai
“Even as domestic growth drivers in the services sector remain strong, weak global demand amid tightening financial conditions remains a key risk to the growth outlook for India in the near term. We see India’s FY23 GDP growth at 7.1% and FY24 GDP growth at 6%.
Devendra Pant, Chief Economist, India Ratings, Mumbai
“GDP growth in 2QFY23 was on expected lines. With the favorable base effect gradually waning, high inflation and weak demand – both internal and external – are having an impact on GDP growth.
He said, ‘GDP growth is expected to decline further in the second half. Unless inflation is under control and global demand improves, it is difficult to sustain the high growth momentum.”