Services continued to drive India's economic growth in the third quarter, while manufacturing remained tepid, according to the latest GDP data.
The Indian economy grew 4.4% in the October-December quarter, according to the latest estimates released by the government's statistical office on Tuesday. That compares with a growth of 6.3% in the July-September quarter.
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The second advance estimates peg GDP growth at 7% for FY23, the same as compared with the first advance estimate of 7% released before the union budget in January. It grew by 9.1% last fiscal. Gross value-added growth for FY23 is pegged at 6.6%, compared to 8.8% last fiscal.
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A Bloomberg poll of 41 economists estimated Q3 GDP growth at 4.7% for the quarter. For the full year, a Bloomberg poll of 39 economists estimated the GDP at 6.9%.
Springing a surprise, India's annual GDP growth slid to a weaker-than-expected three-quarter low and printed below the GVA growth amidst revisions in last year's data, said Aditi Nayar, chief economist at ICRA. "Based on the second advance estimates, the national statistical office implicitly expects GDP growth to improve to 5.1% in Q4 FY2023, which is higher than our current expectation."
Q3 GDP Trends
Industry Trends
Agriculture grew at 3.7% in Q3 compared to 2.4% in Q2.
Mining grew 3.7% in Q3 compared with a contraction of 0.4% in the last quarter.
Manufacturing contracted 1.1% in Q3 compared to a contraction of 3.6% in the preceding quarter.
Electricity and other public utilities grew 8.2%, against a growth of 6% in Q2.
Construction grew 8.4% in Q3 compared to 5.8% in Q2.
Trade, hotel, transport, and communication expanded 9.7% compared with 15.6% in the previous quarter.
The financial services sector grew 5.8% compared with 7.1% in the last quarter.
The public administration segment grew 2% in Q3 compared to 5.6% in Q2.
Expenditure Trends
Private consumption, reflected in private final consumption expenditure, grew 2.1% year-on-year in Q3FY23.
Investments, as reflected by gross fixed capital formation, grew 8.3%.
Government final consumption expenditure contracted by 0.8%.
FY23: Full Year Estimates
Industry Trends
Agriculture is estimated to grow 3.3% in FY23, compared with 3.5% last fiscal.
Mining is estimated to expand by 3.4% compared with 7.1% in the last fiscal.
Manufacturing growth is likely at 0.6%, compared with 11.1% in FY22.
Electricity and other public utilities growth is forecast at 9.2%, compared to 9.9% in FY22.
Construction is estimated to grow 9.1% in FY23 compared to 14.8% in FY22.
Trade, hotel, transportation, and communication growth is estimated at 14.2%, compared to 13.8% in the previous fiscal.
The financial services sector is estimated to grow 6.9%, compared with 4.7% in the last year.
The public administration segment is forecast to grow 7.1% in FY23, compared to 9.7% in FY22.
Expenditure Trends
Private consumption, reflected in private final consumption expenditure, is estimated to grow 7.3% in FY23.
Investments, as reflected by gross fixed capital formation, are estimated to grow 11.2% during the October-December period.
The government's final consumption expenditure is estimated to have grown 1.2% in the third quarter over a year earlier.
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