GDP expanded 6.1% in 2022-23’s last quarter: 2022-23 growth at 7.2%
STORIES, ANALYSES, EXPERT VIEWS
According to the provisional national income data released by the National Statistical Office (NSO) Wednesday, India’s GDP growth accelerated to 6.1% in the January to March 2023 quarter, lifting growth in 2022-23 to 7.2% from 7% estimated earlier.
The Gross Value Added (GVA) rose 7% in 2022-23, compared to 8.8% in 2021-22, with manufacturing GVA growth sliding to just 1.3% from 11.1% a year ago, despite a 4.5% rebound in the final quarter after six months of contraction.
Economists noted that though several sectors delivered a positive surprise, especially in the last quarter of the year, consumption remained tepid and the overall growth pattern remains uneven.
Agri, services growth: The farm and services sector buoyed economic outcomes. The agricultural GVA grew 4%, up from 3.5% in the previous year. The financial, real estate and professional services sectors saw their GVA grow 7.1%, compared to 4.7% in 2021-22. The GVA of the trade, hotels, transport, and communication sectors, as well as services related to broadcasting grew 14%, marginally faster than in the previous year.
Revised GDP, GVA: The NSO also revised GDP and GVA numbers lower for the first half of last year, but bumped up the third quarter figures slightly. The first quarter’s GDP growth in 2022-23 is now pegged at 13.1%, followed by a 6.2% rise in the second quarter and 4.5% growth in the third, up from the 4.4% estimated in February.
In GVA terms, the final three months of 2022-23 recorded a three-quarter high of 6.5%. The growth estimates for the first and second quarters were pared to 11.9% and 5.4% respectively, while the third quarter GVA growth was revised higher to 4.7%, from the 4.6% reckoned earlier.
‘Muted consumption growth’: While growth in private final consumption expenditure witnessed a slight uptick to 2.8% in Q4 from 2.2% in Q3, “it remained muted, belying the uptick in consumer sentiments as per the RBI’s consumer confidence survey,” ICRA chief economist Aditi Nayar pointed out.
May temper growth in current year: The higher-than-expected GDP growth last year could also temper growth expectations for this year, which the government and central bank expect to be around 6.5%, said Madan Sabnavis, the Bank of Baroda’s chief economist. Amid a global slowdown, maintaining growth over 6% will be challenging, he reckoned.
‘Evenly balanced risks’: Chief Economic Advisor (CEA) V. Anantha Nageswaran however, was more optimistic and said the growth momentum continued across agriculture, industry and services sectors in the fourth quarter. India’s 6.1% GDP growth was the fastest among major economies in the fourth quarter, he asserted, adding that prospects look better for this year than they did four months ago.
Concerns consumption: According to the India Express, "the disaggregated data points towards a healthy growth momentum across most sectors…..However, the continuing weakness in private consumption is difficult to reconcile. Private consumption grew by only 2.8 per cent in the fourth quarter, marginally higher than 2.2 per cent in the third quarter, reflecting in part the subdued performance of the consumer durables segment in the index of industrial production. Government consumption has also remained weak, though, on the other hand, investment activity continued to be healthy (mirroring the performance of the capital goods and infrastructure segments in the index of industrial production), while net exports were less of a drag….”
