2 months ago
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India’s real GDP growth likely slowed to 6% in the third quarter of this fiscal year, from 7.6% in Q2, rating firm ICRA said on Wednesday, citing the uneven monsoon, slowing government capex and flagging momentum in some indicators, including industrial activity.
The National Statistical Office, which has estimated GDP growth for 2023-24 at 7.3%, will release its national income estimates for Q3 at the end of this month. ICRA also expects the economy’s Gross Value Added (GVA) to ease to 6%, from 7.4% in Q2, with the expansion in agriculture GVA pegged at a mere 0.5% and industrial GVA growth seen easing to 8.8%, from 13.2% in the preceding quarter.
The deterioration in Q3 industrial growth is partly attributable to an adverse base effect and a deceleration in volume expansion, the rating firm said. Additionally, a mild 0.2% contraction in total spending by the Centre and 25 State governments last quarter, after an 18.3% increase in Q2 is expected to have impacted GVA growth in the period.
“Lower volume growth for the industrial sector, flagging momentum in certain indicators of investment activity, a slowdown in government expenditure and an uneven monsoon are expected to” have dampened the GDP growth in Q3, said Aditi Nayar, chief economist and head of research and outreach at ICRA.
Services GVA growth was projected to have improved to 6.5% in the October-December quarter, from 5.8% in Q2, with the trade, hotels, transport, communication and services related to broadcasting segment estimated to post a near doubling of growth at 8%, from 4.3% in Q2.
