GDP expected to double to 8 percent in Q2 of FY2023, ICRA estimates

Photo:India TV GDP grew by 8% in the second quarter of FY 2023

ICRA As per U.S. estimates, the Gross Domestic Product (GDP) is expected to double to 8 percent in Q2 of FY23 from 3.8 percent in Q1 of FY23. ICRA Chief Economist Aditi Nair said, “We are forecasting GDP expansion at 6.5-7.0 per cent for the second quarter of FY2023. Importantly, the GDP growth for the second quarter of FY2023 is from 8.0 per cent in the fiscal year 2023.” It is expected to grow by 3.8 percent in the first quarter of 2023.

Economic activity picked up pace in August 2022 amid easing of supply-side issues like semi-conductor availability for the auto sector and accumulation of inventory ahead of festivals. Even that has continued to act as a slowdown in external demand.

Improvement in August 2022 with respect to July 2022

On a year-on-year basis, performance of nine of the 16 high frequency indicators including GST e-way bill, motorcycle and passenger vehicles (PV), vehicle registration, consumption of finished steel, petrol and diesel in August 2022 relative to July 2022 has improved.

Meanwhile, the initial figures for the current month are mixed. All India electricity demand witnessed a healthy growth in September 1-13, 2022 due to deficient rainfall in the early part of the month. However, the average daily vehicle registration has registered a sharp MoM decline of 7 per cent in September 2022 so far.

ICRA hopes

ICRA expects registrations to pick up during the Navratri season, with the start of the 15-day Shradh period likely to disrupt overall retail sales in the month. The pre-festive stocking implied by the record-high generation of GST e-way bills in August 2022 signals a revival in confidence and an improvement in demand for goods.

RBI will continue to hike interest rates

Fitch said, “We anticipate that the Reserve Bank will continue to increase interest rates and the repo rate will be at 5.9 percent by the end of the year. The focus of the central bank is to reduce inflation but it will take a decision on this after due consideration and it will depend on the changing conditions of inflation and economic activity. The policy rates are expected to reach the highest level in the near future and remain at 6 per cent for the next full year. But will be It said supply chain disruptions and inflation are hurting the world economy and the growth rate of the global economy is projected to be 2.4 per cent in 2022, a decrease of 0.5 per cent from the earlier estimate. Whereas in 2023 it will be just 1.7 percent.

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