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Economic Times | 30 Aug, 2022 | 08:32AM IST
GDP Q1 Growth Live Updates: India set to post Q1 GDP numbers Wednesday; Bloomberg survey estimates 15.4% rise
Gross domestic product is estimated to rise 15.4% in the three months to June from a year ago, according to a Bloomberg survey of economists. That’s the fastest reading since the April-June quarter of 2021 and compares with a 4.09 expansion in the previous three months.
The Statistics Ministry is due to release the data for the first quarter of the fiscal year that started April 1 at 5:30 p.m. on Wednesday.
The Statistics Ministry is due to release the data for the first quarter of the fiscal year that started April 1 at 5:30 p.m. on Wednesday.
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SBI predictions for Q1 GDP
"As per our (SBI) 'Nowcasting Model', the forecasted GDP growth for Q1 FY23 would be 15.7 pr cent, with an upward bias," the report added. GDP Growth as per SBI NSE -1.71 % composite leading indicator (CLI), which includes parameters from almost all the sectors based on monthly data, shows early signals of turning-points in the economic activity.
Beating the heat
An intense heatwave in major regions across India during the summer season limited economic activity. Despite this, most of the high-frequency economic indicators showed improvement, especially in the services sector activity. There were also significant improvements in the domestic supply delivery time, backlogs and decline in truck freights, which was reflected in the fall of index of supply chain pressures for India.
The road ahead
- Steady growth seen but multiple risks
- FY23 GDP pegged at around 7%
- Demand destruction in India’s key trading partners: US, EU, China
- Uncertain global environment, geo-political situation
- Slowdown in global growth
- Inflation and monetary tightening could dent demand
Pain points for growth
- Russia-Ukraine war, high commodity prices dampened consumption
- Severe heatwave hit wheat output, farm growth
- Farm growth may slip to 3% from 4.1% in Q4
- Slowing exports impacted the industry
- Rising interest rates and high inflation
Key drivers of growth
- Investment growth likely recovered
- Rail freight, GST e-way bills corroborate growth
- GVA growth is seen at 14.5%
- Vaxx drive booster for contact-intensive services
- 17-19% growth in trade, hotels, transport, communication
- High corporate travel, lower infections in Q1
- Lockdown easing benefited urban consumption
GDP estimates for April-June (growth in %)
- ICRA — 13
- India Ratings — 13.3
- HDFC Bank — 14.1
- Bank of Baroda — 14.5-15
- Quanteco — 15
- CRISIL — 15.2
- Kotak Mahindra — 15.5
- SBI — 15.7
- Barclays — 16
- CARE Ratings — 17.8
- RBI — 16.2
Momentum
Resumption of activity in India’s dominant services sector, following the lifting of pandemic curbs, and a record jump in exports added to the momentum.
Mixed signals
For now, indicators are giving mixed signals on activity going forward. While global demand is softening, government spending and a possible pick up in private investment is stoking hopes of a revival.
Rupee falls 7p to 79.91 on strong dollar
The rupee on Monday depreciated 7 paise to close at 79.91 against the American dollar due to risk aversion in the global markets and a strong greenback overseas after hawkish comments from the US Federal Reserve.
A massive sell-off in the domestic equities and rising global crude prices also weakened sentiment in the forex market, experts said. However, suspected RBI intervention restricted the rupee's fall, they added.
A massive sell-off in the domestic equities and rising global crude prices also weakened sentiment in the forex market, experts said. However, suspected RBI intervention restricted the rupee's fall, they added.
IMF says growth pace can be sustained
The International Monetary Fund sees Asia’s third-largest economy sustaining its world-beating growth tag as the lender estimates a growth of 7.4% this year and 6.1% thereafter. A fast pace of expansion is crucial for India to attract investors and create jobs for its growing population.
Curbing inflation
Experts say RBI will retain its focus on containing inflation, with growth looking promising and 140 bps of rate increases already passed on. There might be a further 50 bps of rate hikes in the next two Monetary Policy Committee meets.
