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Business News/ News / India/  India GDP data beats expectations; This is what market experts have to say

India GDP data beats expectations; This is what market experts have to say

India's GDP grew by 6.1% in Q4 2022-23, exceeding expectations and raising the yearly growth rate to 7.2%, which is predicted for FY23. While this is good news, ongoing challenges include slowing global economy and lack of private capital expenditure.

In FY23, 7.2% economic growth is predicted for India. India's exceptional growth rates of 7.2% in FY23 and 6.1% in Q4 show that its economic narrative continues to emerge.Premium
In FY23, 7.2% economic growth is predicted for India. India's exceptional growth rates of 7.2% in FY23 and 6.1% in Q4 show that its economic narrative continues to emerge.

According to official figures released on Wednesday, India's GDP rose by 6.1 percent in the fourth quarter of 2022–2023 to raise the yearly growth rate to 7.2 percent from the previous fiscal's 9.1 percent rise. In FY23, 7.2% economic growth is predicted for India. India's exceptional growth rates of 7.2% in FY23 and 6.1% in Q4 show that its economic narrative continues to emerge. Meanwhile, the growth of the eight core industries in April was 3.5% instead of 3.6% (MoM) and 10.4% (YoY). Here are the market analyst's reactions to GDP data. 

Gaurav Dua, Head - Capital Market Strategy, Sharekhan by BNP Paribas

The GDP figures of 6.1% for Q4 FY2023 is way ahead of consensus estimates of 5.5% and has pushed the full year FY2023 GDP growth to 7.2% -- way higher than street expectations once again. The higher than expected growth in GDP is led by 4.5% surge in the manufacturing sector as compared to -1.4% in Q3FY2023 and 0.6% in Q4 FY2022. The agriculture sector also showed a sharp uptick to 5.5% ahead of expectations.

From equity markets point of view, the strong growth in manufacturing sector only reinforces the trend seen in Q4 quarterly results where many mid-sized companies in sectors like engineering, auto anci, building material etc have shown a strong volume offtake. What’s more, the commentary on demand outlook is also quite encouraging in most of the cases and the easing of input cost pressure is adding to the management confidence.

Nifty has broken out of the 2,000 points range of 16,000-18,000 level and the market seems to be set to scale new peak in H2 of 2023. Interestingly, the broader markets are also doing well after a corrective phase of 18-20 months post peaking out in October 2021. We remain constructive on equity markets given our conviction on the beginning of a multi-year upcycle in the Indian economy ahead.

Sunil Damania, Chief Investment Officer, MarketsMojo 

According to recent data, India's GDP for the January to March quarter has exceeded expectations, growing at a rate of 6.1 per cent compared to the estimated growth of just above 5 percent. This positive development is certainly good news for the Indian economy. However, there are ongoing challenges for the fiscal year 2024, as the global economy is slowing down, leading to lower exports for India over the past three months. 

The lack of strong private capital expenditure also poses a hurdle for sustaining the same growth pace as in the previous fiscal year. In fact, several agencies have revised India's GDP forecast downward, and the uncertainty surrounding the monsoon further adds to potential headwinds that the Indian economy might face in FY2024.

Sujan Hajra - Chief Economist and Executive Director, Anand Rathi Shares and Stock Brokers

The GDP growth for quarter ending March 2023 and the year 2022-23 surprised positively. The main reason for the better than expected performance has been significant traction in fixed investment investment and exports on the demand side and construction and trade, hotel & hospitality on the supply side. Private consumption remains the main source of disappointment. 

Going forward, we expect India's growth to remain around 6% for the financial year ending March 2024. Despite the likely slow down during the current financial year, we expect at least modest pickup in private consumption demand. The compulsions of fiscal consolidation can depress final consumption demand by government. Barring better than expected acceleration in private capital expenditure, we would also expect deceleration in the growth of fixed investment.

Umesh Kumar Mehta, CIO, Samco Mutual Fund

The Q4 GDP numbers are a pleasant surprise at 6.1%, thereby depicting a strong revival in the Indian economy contrary to expectations and macro challenges. The momentum has picked up pace and there is a broad-based recovery from manufacturing, mining to construction and farm sectors. The surprise element was the farm and agriculture sectors whilst manufacturing growth was more or less inline. There is an overall revival in economic activity due to the investments from the government being extremely strong but the consumption side is yet to catch up which is a downer. This capex led mode is surely keeping our economy afloat compared to other major global economies. We expect good upside from the markets and some revisions from the RBI in its upcoming policy meetings.

Suman Bannerjee, CIO, Hedonova, a US based Hedge Fund

The GDP figures surpassing expectations doesn't surprise me. The Rupee has shown relative weakness against the dollar over the past year, while there's been a significant upsurge in export volumes. Moreover, we have been able to decrease our oil import expenses due to our advantageous ties with Russia.

This scenario has resulted in a decrease in the balance of payments account, thus contributing to a boost in GDP. I am also inclined to agree with the projected 7% growth for the forthcoming year. 

The Reserve Bank of India has performed admirably by controlling inflation and maintaining relatively lower interest rates. An environment characterized by moderate inflation and low interest rates fosters business activities, which I believe will contribute to a GDP growth of 7.5% in the coming year.

CA Manish Mishra , Virtual CFO

In the fiscal year 2022-23, the Indian economy witnessed a notable recovery across various sectors compared to the previous year. Urban demand showed remarkable improvement, with automobile sales and passenger vehicle sales bouncing back strongly in Q1, Q2, Q3, and Q4. Agricultural and rural demand also experienced a resurgence, as domestic sales of tractors and two-wheelers demonstrated consistent growth throughout the year. Transport sectors, including domestic and international air passenger traffic, registered significant increases, especially in Q4. 

The construction industry exhibited positive growth, with steel consumption and cement production showing consistent upward trends. Domestic trade showcased encouraging numbers, as GST e-way bill generation and revenue increased steadily in all quarters. The tourism and hospitality sector demonstrated a remarkable recovery, witnessed by higher hotel occupancy rates and an increase in foreign tourist arrivals throughout the year. These data points highlight the overall positive momentum in the Indian economy, particularly in Q4 of 2022-23, indicating a robust economic rebound.

Mohit Ralhan, Chief Executive Officer TIW Capital

The March quarter growth has come out better than estimates, cementing India's position among the fastest-growing major economies of the world. The economy grew 6.1% YoY in Q4 FY 2023, much higher than 4.5% YoY in the previous quarter. The most critical was the growth in private investment activity. Gross fixed capital formation was up 8.9%, becoming the major growth driver while government expenditure took a back seat. Robust exports and lower imports also helped growth as the trade balance came in largely flat in the fourth quarter. Agriculture grew 5.5% while manufacturing growth came in at 4.5%, a substantial improvement after two consecutive quarters of decline. Construction and other contact-intensive services continued to demonstrate robust growth. It augurs well for the coming quarters.

While RBI expects growth to moderate to 6.5% YoY in FY 2024 owing to global factors, still, India will remain amongst the fastest growing major economy in the world and may surprise on the upside.

Arun Singh, Chief Global Economist, Dun and Bradstreet

GVA growth of 7% in FY23 after 8.8% in FY22 shows the resilience of Indian economy in spite of multiple headwinds from global monetary policy spillovers to global economic downturn. However, despite these challenges, resilience in the domestic demand, easing of domestic supply chain pressures, the government’s capex push, and strengthening of bank credit helped India to remain as one of the fastest growing economies in the world. Moreover, the easing of inflationary pressure is creating room for an extended pause in the policy interest rate. Improvement in bank credit to the commercial sector in spite of increase in lending rates, easing current account deficit and subsiding inflation pressures indicate stability in the economy. However, it is important to remain vigilant against potential risks from an increase in crude oil prices, the probability of El Nino to create drought conditions and unfavorable geopolitical developments.

Milan Sharma, Founder, 35North Ventures

GDP growth Q4 at 6.1 % and robust GST collection growing at a healthy pace is  an indicator of what a resilient economy india is .With robust agriculture and revival in industry, government spending will only increase in the coming times.

India as a country will stand out as shining star in the overall global economic turmoil.

Raghvendra Nath, MD, Ladderup Wealth Management Pvt. Ltd

India’s GDP growth for FY23 came in at 7.2% vs 9.1% in FY22, better than the market expectations and RBI’s estimate of 7%. Among the major world economies, India is growing at one of the fastest rates. Real GDP for FY22-23 at constant prices is estimated to be around 160.06 lakh crore. Per Capita GDP of India grew by 6.1% to 1.15 lakh. GDP growth for Q4 was 6.1% vs a market expectation of 5.5%. The GDP growth was led by the construction sector which grew at the fastest pace of 10.4% followed by trade, hotels & transportation growing at 9.1%. The domestic economy is showing strong resilience against the global turmoil as well as monetary tightening as reflected in the strong GDP growth.

VLA Ambala- Sebi registered reseach analyst - stock market today

Indian economy has outperformed the many global economies. India's economy rose 6.1% in the January-March quarter, accelerating from 4.5% in the last quarter and 4.1% in Q4FY22 helped by a pickup in manufacturing activity showed government data on Wednesday. India is going to be hot spot for global investments ahead too and there are many good reasons for that.

For the current fiscal year, economic growth was upgraded to 7.2% from an earlier estimate of 7%.

Growth in the January-March period was higher than the 4.5% expectations in the previous Q3 of 2022-23.

The Gross Domestic Product (GDP) had expanded by 4% in the January-March period of 2021-22, according to data released by the National Statistical Office (NSO).

As per the data, the economy grew by 7.2% in 2022-23 against a 9.1% growth in 2021-22 wherein China which also known as world factory has registered an economic growth of 4.5% in the first three months of 2023.

High inflation has reduced the demand of non-primary product and services in many class of society. However RBI has took timely actions to control it as much as possible.

In the March quarter, India's manufacturing sector output rose 4.5% on-year, compared to 1.1%  in the previous quarter while farm output rose 5.5% compared to 3.7% growth in the same quater.

So despite many non-favorable macro factors, the Indian economy has performed really well.

Farm sector, manufacturing sector and infrastructure sectors have performed over the reception.

Amit Jain, CMD, Arkade Group

Q4 FY23 GDP at 6.1% is above the expected lines. The growth rate for FY23 at 7.2 percent is also marginally higher than the consensus. Construction, Finance, Trade and Hospitality sectors have contributed positively to GDP growth. The positive GDP data will encourage a status quo on policy rates as well as the policy stance. Going forward these factors and improving sentiment will positively impact demand in sectors like housing and real estate.

Dr. Somdutta Singh, founder and CEO of a cross-border, e-commerce accelerator Assiduus Global 

As we witness India's growth story continuing to unfold, with a remarkable growth rate of 7.2% in FY23 and 6.1% in Q4, this resurgence is a testament to India's resilience and determination to bounce back. The agriculture sector's growth and the revival of the manufacturing industry further fuel this momentum, propelling India's economy towards a brighter and more prosperous future.

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Vipul Das
Vipul Das is a Digital Business Content Producer at Livemint. He previously worked for (OneIndia News) and has over 5 years of expertise in the finance and business sector. Stocks, mutual funds, personal finance, tax, and banking are among his specialties, and he is a professional in industry research and business reporting. He received his bachelor's degree from Dr. CV Raman University and also have completed Diploma in Journalism and Mass Communication (DJMC).
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Published: 31 May 2023, 06:21 PM IST
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