India’s GDP jumps 13.5 pc in Q1 on low base, economic recovery

New Delhi: Aided by low base, India’s Gross Domestic Product (GDP) grew 13.5 per cent in the April-June quarter (Q1) of the current financial year 2022-23 as compared to 20.1 per cent in the corresponding quarter last year.

Second wave of Covid pandemic in the April-June quarter of previous year had significantly impacted economic activities.

“Real GDP or Gross Domestic Product (GDP) at Constant (2011-12) Prices in Q1 2022-23 is estimated to attain a level of Rs 36.85 lakh crore, as against Rs 32.46 lakh crore in Q1 2021-22, showing a growth of 13.5 percent as compared to 20.1 percent in Q1 2021-22,” National Statistical Office (NSO) said on Wednesday.

Nominal GDP or GDP at current prices in Q1 2022-23 is estimated at Rs 64.95 lakh crore, as against Rs 51.27 lakh crore in Q1 2021-22, showing a growth of 26.7 per cent as compared to 32.4 per cent in Q1 2021-22.

“The range of forecast (for GDP) somewhere between 13% and 15% had come out. Some were saying 17% also. So, it has shown the lower-end of the consensus forecast largely due to external shocks (Ukraine war and geo-political crisis),” N R Bhanumurthy, Vice Chancellor of BR Ambedkar School of Economics, told UNI.

While subdued demand from major countries have impacted country’s exports in the recent few months, domestic demand remains strong. The high-frequency data such as monthly GST collection, auto sales, electricity consumption and air traffic growth among others have shown strong economic recovery.

“The activity indicators seem to indicate that growth has held up decently well in FY23 till now. For now it seems the growth momentum would continue. But when global demand etc start to come off, whether there is US recession or Europe recession and how much of recession or slowdown we have that will kind of determine how much of a hit India takes. But obviously if we assume that there is a global slowdown that happens, let’s say, late in the year or early next year, then that will have a bearing on India too,” Suvodeep Rakshit, Senior Economist, Kotak Institutional Equities told UNI.

The NSO data showed the farm sector grew at 4.5% year-on-year in the April-June quarter of the current fiscal while manufacturing sector grew at 4.8% during the same period. Mining sector grew at 6.5% during this period. Considered among the labour-intensive sectors, construction sector rose 16.8% year-on-year in the June quarter.

“Within industry, the growth of mining, manufacturing and electricity mildly trailed our projections, suggesting a larger role of commodity prices in squeezing margins. Relative to the pre-covid level, trade, hotels, transport etc stood out as the only sub-sector reporting a contraction in Q1 FY2023, in line with the robust but incomplete recovery in contact-intensive sectors,” said Aditi Nayar, Chief Economist at ICRA.

The GDP data showed Private Final Consumption Expenditure (PFCE) registered a healthy growth of 25.9% while Gross Fixed Capital formation (GFCF), an indicator of investment activity in the country, rose 20.2% in the June quarter of the current fiscal. Exports grew at 14.7% year-on-year whereas Government Final Consumption Expenditure (GFCE) showed a muted growth of 1.3%.during the period under review.

The next release of quarterly GDP estimates for the quarter July-September, 2022 (Q2 2022-23) will be on November 30, 2022.


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