GDP growth slowed to 4.7% in third qtr, shows Mint poll

NEW DELHI: India’s economic growth likely slowed to 4.7% in the December quarter from 6.3% in the preceding three months, according to the median of estimates by 20 economists polled by Mint. The growth deceleration was due to a mix of economic performance and base effect, the economists said.

The base effect is the result of the economy reporting robust growth in the December quarter of 2021 as the economy staged a rapid recovery from the second wave of Covid-19.

Radhika Rao, an economist at DBS Bank, said the growth data, due for release on Tuesday, is likely to point to “further strengthening in the growth momentum”. “Our mix of highfrequency data points to a sequential improvement in the quarter, even as y-o-y growth is set to moderate on base effects,” she added.

The estimates in the poll ranged from 4.3% to 5.8%. If the median projection is true, this will be the slowest growth rate in the fiscal year 2022-23, but faster than the Reserve Bank of India’s estimate of 4.4%.

Because of this, economists anticipate that the December GDP print will help lift the annual growth rate for 2022-23. In its December monetary policy meeting, RBI slashed India’s GDP growth forecast for 2022-23 to 6.8% from the 7% projected earlier.

“A resilient domestic backdrop and continued increase in services activity continued to prop up India’s growth, with only a modest drag coming from manufacturing and exports due to external headwinds,” said Rahul Bajoria, an economist at Barclays, who predicted a 5% GDP growth rate in the December quarter.

Despite challenges such as a decline in exports due to external factors and a looming recession in the West, the Indian economy is widely expected to continue to be a bright spot in the global context.

BLOOMBERG The growth deceleration was due to a mix of economic performance and base effect, the economists said.