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India’s GDP likely to grow 7% in FY23: First advance estimates

International Desk

  08 Jan 2023, 18:44

The Indian economy is seen growing at a rate of 7% in the current financial year, according to the first advanced estimates of the National Statistical Office (NSO).

The expected growth rate is lower than the 8.7% estimate pegged for the previous FY22.

The projections are much lower than government's earlier forecast of 8-8.5 per cent growth but above the Reserve Bank's projection of 6.8 per cent. If the forecast comes true, India's GDP growth will be lower than Saudi Arabia's expected 7.6 per cent expansion. In fact, India's GDP growth in the July-September quarter at 6.3 per cent was lower than the 8.7 per cent of Saudi Arabia.

Earlier last month, the Reserve Bank of India had lowered the country's GDP (gross domestic product) growth forecast to 6.8 percent for the current fiscal from 7 percent earlier, on account of continued geopolitical tensions and tightening of global financial conditions.

The RBI had projected the real GDP growth for 2022-23 at 6.8 percent, with the third quarter at 4.4 percent and the fourth at 4.2 percent. It had pared the growth projection for 2022-23 for the third time in December 2022.

Private final consumption expenditure, a measure of demand, is projected to rise 7.7% in FY23 from a year ago. Gross fixed capital formation, a measure of investment, is estimated to rise around 11.5% in FY23.

The share of private consumption in GDP is expected to rise to 57.2% in FY23 from 56.9% in FY22 and 57.3% in FY21. Per capita gross national income in real terms is estimated to be ₹1,11,807 crore in FY23, higher than ₹1,05,955 crore in FY22 and ₹98,629 crore in FY21.

Agriculture is expected to grow 3.5% in FY23 after growing 3% in FY22. Mining & quarrying is likely to see a reduction in growth at 2.4% in FY23 after growing at around 11.5% in FY22.

Manufacturing growth is pegged to drop from 9.9% in FY22 to 1.6% in FY23 while construction growth may moderate to 9% in FY23 from 11.5% in FY22.

Trade, hotels, transport, communications & services related to broadcasting are pegged to grow at 13.7% after growing at just over 11% in FY22. Financial, real estate & professional services are seen growing at 6.4% in FY23, up from 4.2% in FY22.

In April 2022, India's central bank had cut the GDP growth estimate from 7.8 percent to 7.2 percent, and further lowered it to 7 percent in September, last year.

The GDP growth in the second quarter of the fiscal slowed to 6.3 percent from 13.5 percent in the preceding three months.

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