28 Feb , 2023 By : Monika Singh
India’s economy is estimated to have grown at 4.4% on-year in the fiscal third quarter, slowing down from the previous two quarters, and a tad slower than expected, mainly as manufacturing activity took a hit, and favourable base faded away, the government data showed today. A Reuters poll of analysts had expected India’s Q3FY23 GDP would probably grow at 4.6% year-on-year. Previously, the country’s GDP growth stood at 6.3 per cent In the July-September quarter, and at 13.5 per cent in April-June quarter. India’s GDP at constant prices in Q3 FY 2022-23 is estimated at Rs 40.19 lakh crore, the Ministry of Statistics and Programme Implementation said.
“The Q3 GDP growth rate at 4.4% is on expected lines. The loss in growth momentum is due to fading away of favorable base effect, slowdown in pent up demand due to high inflation & interest rates and contraction in manufacturing sectors. Some of the high frequency indicators were already pointing at muted growth for the quarter vs Q2, hence, lower GDP growth rate in Q3 didn’t come as a surprise,” said Ritika Chhabra, Quant Macro Strategist, Prabhudas Lilladher PMS. Manufacturing contracted in the third quarter, with the growth coming in at -1.1% (negative). Meanwhile, Q3 farm growth was at 3.7 per cent, mining growth at 3.7 per cent, and trade, hotel, transport, telecom growth at 9.7 per cent year-on-year.
Further, growth in GDP for the full year 2022-23 is estimated at 7.0 per cent on-year, slowing significantly from 9.1 per cent annual expansion seen in the previous year 2021-22. RBI had projected the real GDP growth for 2022-23 at 6.8 per cent. It had trimmed the growth projection for 2022-23 for the third time in December the previous year. The Asian Development Bank has projected the economy to expand 7 per cent while the IMF has pegged the growth at 6.8 per cent in 2022-23.
Earlier today, as per the data from the Controller General of Accounts (CGA), the government’s fiscal deficit touched 67.8 per cent of the full-year target at the end of January. The fiscal deficit during April-January period stood at Rs 11.9 lakh crore. Experts had predicted a moderation in GDP growth in the third quarter due to a slowdown in demand which was caused by the RBI’s aggressive rate hikes and policy tightening in order to control inflation.
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