However, expectations around a potential return of the El Nino phenomenon around the summer season could lead to a sub-par South-West monsoon in 2023, and hurt the prospects of crop production and rural demand. While the situation is evolving, the downside to the FY2024 GDP growth projection could be up to 50 basis points, rating agency ICRA said.

India’s year-on-year (YoY) GDP growth slid to a weaker-than-expected three-quarter low of 4.4 per cent in the third quarter (Q3) of this fiscal (FY23) (ICRA expected 5.1 per cent) from 6.3 per cent in Q2, as per data released by the National Statistical Office. ICRA expects the country’s GDP growth to moderate to nearly 6 per cent in FY24.

The GDP growth figure for Q3 FY23 was lower than the gross value added (GVA) expansion of 4.6 per cent for that quarter. GVA growth was 5.5 per cent in Q2 FY23.

Compared to pre-COVID levels of FY20, GDP growth rose quite appreciably to 11.6 per cent in Q3 FY23 from 9.4 per cent in the previous quarter, indicating an improved albeit uneven recovery, ICRA said in a release.

On an upwardly revised estimate for FY22, the forecast for GDP expansion in FY2023 has been retained at 7 per cent in the second advance estimates (SAE), in line with what was published in January 2023. This implies a YoY growth of 5.1 per cent in Q4 FY2023, a step up from the disappointing Q3 print.

NSO has implicitly projected a GDP expansion of 5.1 per cent in Q4 FY23, slightly higher than ICRA’s projections of 4.5-5 per cent YoY growth for the quarter.

Fibre2Fashion News Desk (DS)