The Indian economy grew 7.2% in the previous financial year ending March 31 this year, with quarterly growth coming in at 6.1% in last quarter (Q4) of the financial year (January to March 2023), data released by the Ministry of Statistics and Programme Implementation (MOSPI) shows.
These yearly numbers have come in marginally above expectations. The official estimate by the government for the full year stood at 7%. Economists told Reuters that the growth rate for the full year would be around 6.8%. However, these economists were only expecting growth in Q4 to be around 5%, which today's estimates have greatly exceeded.
India's gross domestic product - or the final value of goods and services produced within its borders throughout the year - stood at ₹₹1,60,06,425 crores, over ₹1,49,25,840 crores in FY22, yielding this yearly growth rate of 7.2%
The first quarter of the last financial year - April to June 2022 - showed India growing 13.5%, largely missing estimates of 15.2%. In the second quarter, India grew 6.3%. In the third quarter, it was 5%.
India reports its quarterly gross domestic product (GDP) and national accounting figures on a year-on-year basis. Even quarterly figures are reported over the same quarter of the last financial year, meaning that the 6.1% growth rate for the January to March 2023 quarter is relative to the January to March 2022 quarter.
The average Indian was also left 6.1% richer, as measured by the GDP per capita (or the GDP divided by the Indian population). In FY22, this was ₹1,09,060 (revised) which rose to ₹1,15,746. .
Economists and international institutions like the International Monetary Fund expected growth to slow for the ongoing financial year as central banks around the world continue with a regime of heightened interest rate to combat stubborn inflation. For the ongoing financial year, the Reserve Bank of India states that growth would be 6.4% and 6.8% for the IMF.
These simultaneous hikes has heralded the risk of several advanced economies to enter a period of recession. Germany has already entered one, while economists call one in the United States imminent. The United Kingdom avoided a recession in late 2022 after a series of political and economic debacles, but the risk of that still lingers.
For example, a reduced demand abroad could hamper India exports of services like information technology deals with foreign clients and manufactured goods; a reality that is playing on the minds of Indian exporters.
Performance of select indicators
MOSPI has also highlighted the performance in several main indicators (measured year-on-year over the corresponding quarter in the previous financial year).
- The production of rice grew 4.1% yearly and 32.1% quarterly
- The consumption of steel boomed, growing 13.3% yearly and 17.1% quarterly in a marked improvement over its consumption in FY22 where it grew only at 0.2%
- More passengers were handled at airports, growing 73.7% in the year and 58.1% quarter. However, in the last financial year, this year figure grew 133%, meaning it more than doubled
- Commercial vehicle sales grew 34.3% yearly and private vehicle sales grew 18.7%.
- Telecom subscribers fell 0.5%, so did cargo handled at airports, falling 5%, both measured yearly
The press release can be seen here.
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