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India’s Q4FY22 GDP

Economy grows at slowest pace during Q4

* India’s GDP grew by 4.1% in Q4FY22 as compared to 5.4% in Q3FY22 and 2.5% in Q4FY21.

* Economy grew at a slow quarterly growth rate during Q4 of FY22 impacted by the Covid third wave and high commodity & crude oil prices.

* Agriculture grew by 4.1% in Q4FY22 (2.5% in Q3FY22), industry at 1.3% in Q4FY22 (0.3% in Q3FY22) and services at 5.5% in Q4FY22 (8.1% in Q3FY22)

* Private consumption declined during quarter impacted by higher inflation and Covid related restrictions.

* Govt spending and capital investments revived strongly on yearly & sequentially basis.

* In FY22, GDP grew by 8.7% v/s contraction of -6.6% in FY21.

* GDP grew by 1.5% to Rs147 lakh crore in FY22 over FY20 base of Rs145 lakh crore and thereby recorded the full recovery from the impact of pandemic

Indian economy grows at 4.1% in Q4FY22 and 8.7% in FY22

India’s GDP grew by 4.1% in Q4FY22 as compared to 5.4% in Q3FY22 and 2.5% in the last quarter of previous fiscal. Sequential decline in the economic activity was widely expected due to disruptions by third Covid wave which further amplified by the Ukraine- Russia war by increasing inflation through disrupting supply chain. Economy grew at slowest pace during the quarter pulling down the GDP growth in FY22 to 8.7%, below the govt’s estimate of 8.9%. Meanwhile, India’s GDP crossed the pre-pandemic level to establish full economic recovery, growing by 1.5% to Rs147 lakh crore over FY20 base of Rs146 lakh crore.

Manufacturing output declined by -0.2% in Q4FY22 as compared to 0.3% in Q3FY22. Private consumption declined by - 2.9% on sequential basis (14.7% QoQ in Q3FY22) on account of impact of the third Covid wave and high commodity prices. While capital investments (19% QoQ) and govt expenditures (30.3% QoQ) were recorded strong sequential improved offsetting the impact of weak private consumption. Core GVA grew by 3.2% YoY/12.4% QoQ suggesting recovery in the core economic activity. Indian economy marked the full recovery from pandemic woes, though current fiscal growth outlook remains clouded due to concerns such as inflationary pressure and ongoing Ukraine-Russia War both of which does not seem to ease anytime soon.

Private consumption declines in Q4FY22; capital investments pick-up

Private consumption declines in Q4FY22; capital investments pick-up Private consumption declined by -2.9% QoQ after recording a strong sequential boost of 14.7% in the previous quarter as higher prices weighed on consumer ballet. Restrictions to contain the Omicron virus during Jan also weighed on the consumer demand. Though, the impact was offset by strong sequential growth in capital investment (19% QoQ) and govt expenditures (30.3% QoQ). On YoY basis, private consumption (PFCF) grew by 1.8%, capital investment (GFCF) at 5.1% and govt expenditures at 4.8%. India GDP is expected to grow ~7% in FY23 impacted by high inflation and concern over global supply situation. Crude oil price have been hovering over $100/barrel and does not seem to ease significantly considering the prevailing global geopolitical situations. Due to the likely high inflation, interest rate to harden though govt remains committed to continue with high capex spending after announcing 35% increase in Capex for FY23 in the Budget.

GVA grows at 3.9%; manufacturing contractsin Q4FY22

GVA grew by 3.9% in Q4FY22 v/s 4.7% in Q3FY22 and 5.7% in Q4FY21. GVA at Rs136 lakh crore in FY22 crossed the prepandemic level of Rs132 lakh crore thus marked the full recovery from the pandemic impact. Agriculture sector grew by 4.1% in Q4FY22 v/s 2.5% in Q3FY22 and 2.8% in same quarter of previous fiscal. In FY22, agri sector grew by 3.0% v/s 3.3 in FY21. Growth of industrial sector stood at 1.3% during the reported quarter impacted by manufacturing (-0.2% in Q4FY22 v/s 0.3% in Q3FY22) and construction (2.0% in Q4FY22 v/s -2.8% in Q3FY22). Mining/electricity grew at 6.7%/ 4.5% in Q4FY22 v/s 9.2%/3.7% in Q3FY22. Services sector output growth eased to 5.5% in Q4FY22 from 8.1% in Q3FY22 as the contact services industry was impacted by Omicron related localized lockdown. Activity of trade, hotel and restaurants reduced to 5.3% in Q4FY22 v/s 6.3% in Q3FY22. Financial, real estate & professional services grew by 4.3% in Q4FY22 v/s 4.2% in Q3FY22. Output of govt spending on public, defence & others rose by 7.7% in the reported quarter v/s 16.7% in the previous quarter.

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