India’s GDP growth slows to 4.4% in Q3

India’s Gross Domestic Product (GDP) growth rate declined to 4.4% in the October-December 2022 period, witnessing a drop for the second consecutive quarter, as per the Ministry of Statistics and Programme Implementation data.

The GDP growth rate fell to 4.4% in Q3FY23 from 6.3% recorded in the second quarter of FY2023. The economy grew at 13.2% in Q1FY23. The high growth in the first quarter comes on the back of a lower base recorded earlier in the year.

“The growth momentum carried on in October-December and it was the base effect which resulted in a GDP growth rate of 4.4%,” said Chief Economic Advisor (CEA) V Anantha Nageswaran.

The Reserve Bank of India (RBI), in December, had forecasted India’s GDP growth rate to be at 4.4% in the December quarter. The central bank had estimated that the GDP growth rate for the entire year would be at 6.8%. However, the first advance estimate of the GDP released by the statistics ministry estimated the GDP growth rate for FY2022-2023 to be at 7%. The estimate of a 7% growth rate has been maintained in the second advanced estimate released by the government on February 28.

In the December quarter, the Gross Value Added (GVA) growth was recorded at 4.6% compared to the 5.5% growth in the preceding quarter. The consumption growth also saw a decline as it was to the tune of 2.1% in the December quarter compared to the figure of 8.8% in the previous quarter.

“India is poised to achieve 7 percent GDP growth in 2022-23 despite global slowdown,” the CEA added.

Additionally, the capital formation growth saw a decline in the December quarter as it came down to 8.3% from 9.7% recorded in the quarter ended in September.

The estimated growth in the nominal GDP in the second advanced estimate has seen an uptick to 15.9% which is up from the estimate of 15.3% from the first advanced estimate of the GDP. The GDP growth estimates for the first quarter of the next financial year have been revised to 13.2% from 13.5%.

Meanwhile, the International Monetary Fund (IMF) forecasts the Indian economy to grow at 6.8% in 2022-23. The Asian Development Bank projects India’s GDP growth to be at 7% for the current fiscal year.

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