India Q2 FY23 GDP growth came in line with our expectations at 6.3%YoY.
Download ReportIndia Q2FY23 GDP - Hits and Misses
India Q2 FY23 GDP growth came in line with our expectations at 6.3%YoY. The downside was primarily led by waning of a favorable statistical base. While agriculture growth surprised on the upside despite uneven progress and distribution of Southwest monsoon rainfall, industry growth slipped into a contraction likely due– 1) Elevated commodity/input prices weighing on corporate profitability, 2) Slowdown in IIP in Q2FY23, which captures unorganized/smaller firms, with growth for both consumer durables and non-durables slipping into contraction along with 3) Delayed and less robust pick-up in pre-festive stocking in an uncertain economic environment.
India’s growth has been resilient up to Q2 FY23, despite an uncertain global backdrop of slowing growth, elevated inflation, tightening financial conditions, and lingering geopolitical tensions. Looking ahead, for H2 FY23, GDP growth is anticipated to pivot lower (at a faster pace) as a favourable statistical base peters out and global headwinds play catch up in impact along with the impact of cumulative rate tightening by RBI. We continue to hold our FY23 GDP growth estimate at 6.8%.