India's Q3 GDP numbers: Testing growth guardrails

One minus is that aggregate private sector capex participation will lag, barring few sectoral pockets

Radhika Rao

One needs to be mindful of two aspects while interpreting Q3 FY23 growth numbers. The pick-up in activity was back-ended in 2020 and 2021 as lockdowns/curbs at the start of the year were eased through the next few months, lifting output by end-year, in effect posing considerable base effects to the December 2022 quarter. Add to that, Revised Estimates for the past two years were released concurrently, influencing the historical quarterly trend.
In this regard, the Revised Estimates for FY22 GDP growth was raised by 40 basis points (bps) to 9.1 per cent, in essence lifting the comparative base versus FY23. The FY21 print was also increased by 90 bps to -5.7 per cent. Absolute numbers
(in rupee terms) for Q3 FY21 were also revised up a notch. Against this backdrop, the actual real GDP growth for Q3 FY23 at 4.4 per cent was a small miss compared to our forecast. Growth relative to pre-Covid level (Q3FY20) stands at 12 per cent increase in Q3 FY23.
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

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First Published: Feb 28 2023 | 11:04 PM IST

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