PremiumFor Q3FY23, the experts predict moderation in the growth momentum as the economic activity in the quarter remained uneven. Stay tuned for LIVE updates on India's Q3 GDP announcement
The government will release India’s gross domestic product (GDP) data for the October-December 2022 quarter (Q3FY23) on February 28. The GDP growth rate was moderated to 6.3 per cent in the preceding quarter after double-digit expansion in the Q1 of the current financial year. The Q3 GDP numbers will play a key role in setting markets sentiment.
For Q3FY23, the experts predict moderation in the growth momentum as the economic activity in the quarter remained distinctly uneven. Although, among key sectors, agriculture is likely to see reasonable improvement.
The RBI had projected the real GDP growth for 2022-23 at 6.8 per cent, and for the third quarter at 4.4 per cent.
Due to mix trend in crop production in the previous quarter, there are chances of low agri-GVA growth. ICRA has estimated agri-GVA growth to be at 4.0% for Q3 FY2023. The estimate is based on the mixed trend in the production of kharif crops indicated in the 2nd Advance Estimates for FY2023.
The industrial GVA growth is expected to have reverted to a YoY growth of ~1.0% in Q3 FY 2023, said ICRA. It received a mild 0.8% contraction in Q2 FY23. The industry is aided by an improvement in all the four sub-sectors, namely manufacturing (to -3.0% from -4.3%), mining and quarrying (to +5.0% from -2.8%), electricity, gas, water supply and other utilities (to +7.0% from +5.6%) and construction (to +7.0% from +6.6%).
The credit rating agency made clear that the previous quarter will see a moderation due to base-effect. However, services sector would outpace the rise in agriculture, forestry and fishing. Service sector would induce a base-effect led moderation to +7.4% from 9.3% and agriculture, forestry and fishing will lead to a moderation of +4.0% in Q3 FY 2023.
Investment Information and Credit Rating Agency (ICRA) has projected a year-on-year growth of GDP in Q3 of current financial year to be set at 5.1%. However, the GDP growth over the pre-Covid levels is expected to improve further to 11.6% in Q3 FY2023 relative to the 7.6% seen in the previous quarter, boosted by continued recovery in the services sector, it said.
According to experts, the sharp fall in year-on-year growth rate seen in consecutive quarters and in Q3 data is the result of fading of pandemic-induced base effect. The steep fall in economic growth due to pandemic has been normalised and its no more contributing towards higher growth figures.
India's GDP growth will be affected by weak global demand and monetary tightening by the RBI. The GDP data can show further slow down of economy amid pent-up demand ease and patchy private investment, reported Reuters.
Ahead of the release of Q3 GDP data for FY 2022-23, experts suggest on a Mint poll that India's economic growth is likely to be slowed down to 4.7% in the December quarter.
The government will release India’s gross domestic product (GDP) data for the October-December 2022 quarter (Q3FY23) on February 28.
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