Q1 GDP growth: High on services and base effect

Indian economy likely grew 15.1% in Q1 of FY23 aided by a favourable base and revival in services as all Covid restrictions were removed. Kirtika Suneja reports on expert estimates ahead of the April-June quarter national income estimates ahead of the official data release next week.
GDP estimates for April-June
(Growth in %)

• ICRA 13
• INDIA RATINGS 13.3
• HDFC BANK 14.1
• BANK OF BARODA 14.5-15
• QUANTECO 15
• CRISIL 15.2
• KOTAK MAHINDRA 15.5
• SBI 15.7
• BARCLAYS 16
• CARE 17.8
• RBI 16.2

KEY DRIVERS

• Investment growth likely recovered
• Rail freight, GST e-way bills corroborate growth
• GVA growth is seen at 14.5%
• Vaxx drive booster for contact-intensive services
• 17-19% growth in trade, hotels, transport, communication
• High corporate travel, lower infections in Q1
• Lockdown easing benefited urban consumption

DRAGS ON GROWTH

• Russia-Ukraine war, high commodity prices dampened consumption
• Severe heatwave hit wheat output, farm growth
• Farm growth may slip to 3% from 4.1% in Q4
• Slowing exports impacted the industry
• Rising interest rates and high inflation

WHAT’S AHEAD

• Steady growth seen but multiple risks
• FY23 GDP pegged at around 7%
• Demand destruction in India’s key trading partners: US, EU, China
• Uncertain global environment, geo-political situation
• Slowdown in global growth
• Inflation and monetary tightening could dent demand