GDP grows at 7.2% in 2022-23, beats govt’s projection

The Indian economy grew by 7.2 per cent in the financial year ended March 2023, which is 20 basis points higher than government’s estimate, but sharply lower when compared to 9.1 per cent growth registered in 2021-22.

Reversing the downward trend, the gross domestic product (GDP) expanded by 6.1 per cent in the fourth quarter of 2022-23, helped by an uptick in manufacturing activities. In the second advance estimate released in February, the National Statistical Office (NSO) had pegged January-March quarter growth at 5.1 per cent.

Better than expected growth in the January-March quarter augurs well for the economic expansion in the current financial year.

“We are now prepared to say that risks to our GDP growth forecast of 6.5 per cent for 2023-24 are now more evenly balanced than a few months ago when downside risks to the forecast were greater,” said Chief Economic Adviser V Anantha Nageswaran.

Radhika Rao, economist at DBS Bank, said a “strong GDP beat will provide the central bank headroom to extend its pause in June.”

India’s real GDP or GDP at constant (2011-12) prices in the year 2022-23 is estimated to attain a level of Rs 160.06 lakh crore, as against the first revised estimates of GDP for the year 2021-22 of Rs 149.26 lakh crore, as per data released by the National Statistical Office (NSO) on Wednesday.

Nominal GDP or GDP at current prices in the year 2022-23 is estimated at Rs 272.41 lakh crore, as against Rs 234.71 lakh crore recorded in the previous year, showing a growth of 16.1 per cent.

In the January-March 2023 quarter, the GDP at constant (2011-12) prices rose to Rs 43.62 lakh crore, which is 6.1 per cent higher when compared with Rs 41.12 lakh crore recorded in the corresponding period of the previous year.

“GDP expansion in Q4 FY2023 was appreciably higher than expected while remaining uneven and confirming the hopes of a sequential pick up in the pace of growth of economic activity,” said Aditi Nayar, chief economist and head of research and outreach, ICRA.

The economic expansion in the January-March quarter is sharply higher than 4.4 per cent growth recorded in the third quarter of 2022-23. The GDP growth stood at 6.3 per cent in Q2 and 13.2 per cent in Q1 of the financial year 2022-23.

“GDP growth at 7.2 per cent for fiscal 2023 indicates the economy has done better than expected. Importantly, this growth comes on a higher base – due to upward revision of fiscal 2022 data,” said Dharmakirti Joshi, chief economist at CRISIL.

Assocham Secretary General Deepak Sood said, “we expect the momentum to continue given softening of raw material prices including crude oil and peaking of interest rates.”

In the fourth quarter of 2022-23, the biggest surprise was the sharp pick up in manufacturing activities. Manufacturing output rose by 4.5 per cent in the January-March period as against 1.1 per cent contraction recorded in the previous quarter.