The Centre on Tuesday will release gross domestic product (GDP) data for the October-December 2022 quarter (Q3FY23). The data on the second advance estimate of the Gross Domestic Product for 2022-23 will be released by the Ministry of Statistics and Programme Implementation in the evening.
The ministry will also release the revised advacnce estimate of economic growth for 2021-22 which was estimated at 8.7 per cent in May last year. As per the first advance estimates released in January, the GDP growth was pegged at 7 per cent for 2022-23, reported news agency PTI.
The data will be released after the Reserve Bank of India raised interest rates by a cumulative 250 basis points since last May to rein in inflation. The past rate hikes are expected to have an impact on consumption and economic growth.
Know why data is significant
The data holds significance since December 2022, the Reserve Bank of India lowered the country’s GDP growth forecast to 6.8 per cent for the current fiscal. The projection was slashed from the earlier prediction of 7 per cent.
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RBI had projected the real GDP growth for 2022-23 at 6.8 per cent, with the third quarter and fourth quarter growth at 4.4 per cent and 4.2 per cent, respectively. The growth projection was trimmed for 2022-23 for the third time in December last year.
Here’s what economists project
As per the projection by economists in a Bloomberg survey, Gross domestic product probably rose 4.7 per cent last quarter from a year ago. It is said to be the slowest quarterly performance since the 4.09 per cent expansion in the three months ended March last year.
Economists are predicting 6.9 per cent growth for the fiscal year from April 2022 to March 2023, a tad below the 7 per cent estimate by the government earlier and slightly higher than the International Monetary Fund’s 6.8 per cent projection.
“There are signs that higher interest rates are feeding through to the real economy,” the report cited Shilan Shah, a senior economist at Capital Economics in Singapore as saying.
Even the Reuters poll also suggested India’s GDP growth will be affected by weak global demand and monetary tightening by the RBI. The GDP data can project a further slowdown of the economy amid pent-up demand ease and patchy private investment, according to the news agency Reuters report.
“There are base effects that are normalizing and pulling down the annual numbers. The support from agriculture might be lower and also manufacturing could be a drag,” the report quoted Sakshi Gupta, principal economist at HDFC Bank as saying. On the demand side, exports and consumer demand may have contributed to the slowdown, while investments held steady, she noted.
The Asian Development Bank also projected the Indian economy to expand 7 per cent while the International Monetary Fund (IMF) has pegged the growth at 6.8 per cent in 2022-23.