Upswing Continues: India's GDP growth exceeds estimates at 7.2% in FY23
India's gross domestic product (GDP) growth for the fiscal year 2022-23 is estimated to be 7.2%, according to the National Statistical Office (NSO).
The announcement made on Wednesday by the NSO, which falls under the Ministry of Statistics and Programme Implementation, revealed a lower growth rate compared to the previous year's 9.1%.
The NSO reported that the GDP growth during the fourth quarter of 2022-23 stood at 6.1%. However, economists were pleasantly surprised by the numbers, which exceeded their earlier expectations.
The NSO further disclosed that the GDP for the year 2022-23 is projected to reach Rs 160.06 lakh crore, compared to the revised estimates of Rs 149.26 lakh crore for the previous year.
The growth in real GDP for 2022-23 is estimated at 7.2%, a decline from the 9.1% growth recorded in 2021-22.
Similarly, the GDP for Q4 2022-23 is estimated to be Rs 43.62 lakh crore, showing a growth of 6.1% compared to Rs 41.12 lakh crore in Q4 2021-22, as per the NSO.
Shaktikanta Das, the Governor of the Reserve Bank of India (RBI), expressed optimism about India's GDP surpassing the estimated 7% growth for FY23, citing positive trends during the recent annual conference of the Confederation of Indian Industry (CII). Additionally, he projected a growth rate of 6.5% for FY24.
The 7.2% GDP growth for fiscal year 2023 indicates that the Indian economy has performed better than anticipated. Dharmakirti Joshi, Chief Economist at CRISIL, highlighted the significance of this growth, taking into account the upward revision of the fiscal 2022 data.
However, he cautioned that the economy might slow down to 6% in the current fiscal year due to the impact of a decelerating global economy on exports and the effects of interest rate hikes on interest-sensitive sectors. Nevertheless, even at 6%, India is set to be the fastest-growing G-20 economy this fiscal year.
All eyes are now focused on the performance of the monsoon season, especially in terms of agricultural output and prices, added Joshi.
Aditi Nayar, Chief Economist and Head of Research and Outreach at ICRA Ltd, noted that the GDP expansion in Q4 FY2023 exceeded expectations, indicating a sequential improvement in economic activity growth to 6.1% from the low of 4.5% witnessed in Q3 FY2023.
The positive surprise in Q4 also contributed to the FY2023 GDP growth of 7.2%, surpassing the advance estimate of 7% by a significant margin.
The Indian economy has shown healthy momentum, with Q4 FY2023 experiencing a robust 17.3% expansion compared to the pre-Covid levels of FY2019, which stood at 15.3% in Q3 FY2023, as per Nayar.
The industrial sector played a significant role in the positive surprise in Q4 GDP growth. Manufacturing rebounded with a year-on-year growth of 4.5% in Q4 FY2023, following contractions in the previous two quarters.
This rebound can be attributed to increased manufacturing volumes and improved margins, partly due to sustained moderation in input costs. (Edited)