India’s GDP growth slows in 2023

India’s GDP growth slows to 4.4% in October-December quarter

The Indian economy grew at a slower rate of 4.4% in the October-December quarter of 2022, compared to 6.3% in the previous three-month period, indicating the impact of global headwinds and weaker spending.

According to the Ministry of Statistics and Programme Implementation, India’s gross domestic product (GDP) growth rate dropped for the second consecutive quarter in the months of October to December, coming in at 4.4 percent.

GDP Growth in the third quarter (Q3):

The most recent quarterly growth figure of 4.4 percent is lower than the 6.3 percent growth that was observed in the second quarter of 2022–2023 and was itself less than half the 13.2 percent increase that was reported in April–June 2022 as the G.D.P growth rate benefited from a low base in the early part of the year.

GDP growth predictions made by RBI for 2023–2024 fiscal year:

The Reserve Bank of India (RBI) predicted a growth rate of 4.4 percent for the last quarter of 2022 in December. The central bank had, however, predicted a 6.8% growth rate for this year at the time.

Nevertheless, according to the first advance estimate of GDP provided by the statistics ministry in early January, India’s GDP was projected to increase by 7% in 2022–2023. The government’s second advance estimate, which was made public on February 28, kept India’s full-year GDP growth prediction for this year at 7%.

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Manufacturing: A cause of concern:

According to data released by the National Statistical Office, India’s Gross Domestic Product (GDP) growth slowed to a three-quarter low of 4.4% in October–December 2022–23, primarily because of a 1.1% contraction in manufacturing, as well as weaker private consumption demand and government expenditure (NSO)

Manufacturing appears to have slowed down, but there are adequate high-frequency indicators reflecting rather robust industrial activity, according to Chief Economic Advisor V Anantha Nageswaran. As a result of rising input costs, he said, manufacturing “appears to have slowed down on the surface, but if you look at PMI (Purchasing Managers’ Index) indicators, the manufacturing sector is in good health and performance of core sector in January tells us we do have a fairly robust manufacturing growth rate in the fourth quarter.”

GDP growth of 7% is projected for this fiscal year (2022–2024).

After the announcement of the G.D.P figures, Chief Economic Adviser (CEA) V Anantha Nageswaran stated in a press briefing that “India is positioned to reach 7 percent GDP growth in 2022-23 despite the global recession.”

The economic momentum persisted from October through December, and it was the base effect that produced a 4.4 percent G.D.P growth rate, according to the CEA. Compared to the period from July to September, the third quarter’s gross value added (GVA) increase was 4.6 percent as opposed to 5.5 percent. …

The consumption increase for the months of October to December was 2.1 percent, which is less than the 8.8 percent rise for the months of July to September. In addition, capital creation growth decreased to 8.3 percent in the third quarter of the current fiscal year from 9.7 percent in the second.

Real and nominal GDP growth during the current fiscal year (2022–2024):

The second advance estimate estimates a 7% real GDP growth for the nation in FY23. The initial advance estimate also included this forecast.

The second advance estimate places the nominal G.D.P growth at 15.9 percent, up from the first advance estimate’s 15.4 percent projection. Also, the administration reduced the GDP growth estimate for the April-June quarter from 13.5 percent to 13.2 percent.

Is GDP calculated quarterly in India?

India calculates GDP on a quarterly and annual basis. A financial year is included in the annual calculation of GDP. In India, the fiscal year begins on April 1 and concludes on March 31 of the following year.