The release of the gross domestic product (GDP) numbers for the fourth quarter of FY23 is scheduled for Wednesday. Analysts have provided estimates suggesting that India's GDP growth for the January-March quarter will range between 4.9% and 5.5%, an improvement from the previous quarter's 4.4%. In the three months leading up to December 2022, the Indian economy grew at a year-on-year rate of 4.4%, significantly lower than the 6.3% growth in September.
The Reserve Bank of India (RBI) stated in its annual report that it expects real GDP in Q4FY23 to grow by 5.1%. On the other hand, the National Statistical Office (NSO) projected the FY23 GDP growth to be 7%. The State Bank of India, in its Ecowrap report, forecasted Q4FY23 GDP growth at 5.5% and anticipated that India's GDP growth for the entire FY23 would reach 7.1%.
Analysts hold various perspectives on the upcoming GDP numbers. B&K Securities believes that the GDP growth for the current year will hover around 7%, driven by private consumption and the services sector. However, the brokerage also cautioned that FY24's GDP growth in India would be negatively impacted by a slowdown in private consumption. They further expressed concerns about the global economy slowing down, which would have adverse effects on exports, manufacturing, and overall growth.
Emkay Global Financial Services, a financial services company, expects Q4 growth to be fueled by trade, hotel, and transportation sectors, as well as increased government spending. They also noted signs of consumption recovery. Their lead economist projected Q4 GDP at 5.1% and the FY23 GDP at 7%. However, they anticipate a slowdown to 5.7% in FY24.
Rating agency Icra predicts that India's GDP growth for Q4FY23 will reach 4.9%, a modest increase from Q3FY23's 4.4%. They emphasized that this quarter's growth will be driven by the services sector. Aditi Nayar, Chief Economist and Head of Research and Outreach at Icra mentioned that economic activity in Q4FY23 remained uneven, with domestic demand for services outpacing goods, and strong export performance in services despite a contraction in merchandise items.
Nayar also highlighted that lower commodity prices provided some relief for margins in certain sectors, while investment activity and government spending exhibited mixed trends. However, the unseasonal rains are expected to have affected the rabi crop output, impacting agricultural gross value added (GVA) growth.
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