GDP growth may print at about 4% in Q4FY23: India Ratings analyst

The growth moderated to a three-quarter low of 4.4 per cent in Q3 as against the consensus projection of 5.1 per cent, pulled down by the poor show by manufacturing and exports, among others

Pencilling in just 4 per cent GDP growth for the fourth quarter, a rating agency report has said the final growth numbers for the full year will be lower than the second advance estimate of 7 per cent.

The economy grew at 13.2 per cent in the first quarter and 6.3 per cent in the second three-month period due to base effect and much lower than the consensus expectation of 4.4 per cent in the third quarter. To close the full fiscal with a 7 per cent growth, the GDP should deliver at least a 4.1 per cent uptick.

India Ratings analyst Paras Jasrai in a report said the agency expects GDP to print in at around 4 per cent in Q4, which would mean GDP growth for FY23 could be lower than 7 per cent but did not quantify the same.

The National Statistical Office, in its second advanced estimate, has retained GDP growth at 7 per cent for the full year, which factors in a growth of 5.1 per cent. However, the agency sees many downside risks to this estimate, such as the pent-up demand, which had provided thrust to growth, is normalising; exports that had been buoyant are facing headwinds from the global slowdown and credit growth is facing tighter financial conditions.

The ongoing spell of elevated temperatures in the north in February has raised concerns regarding wheat production.

In addition, the Met department has warned of the plausibility of severe heatwaves during March-May. This can not only affect agricultural output, which has been pegged to grow at 4.3 per cent in Q4, but also keep inflation at elevated levels that can impact rural demand, which has been under stress since the pandemic, Jasrai explained.