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Below are Perspective on the GDP Numbers for Q2 from Anita Rangan – Economist, Equirus

India’s Q2 GDP for FY23 came in at 6.3% y-o-y, slightly above market expectations of 6.2%. Alongside GVA is 5.6%. On a Y-o-Y basis, strong recovery is seen in the trade, hotels segment at 14.7% while the other services growing at mid-high single digit. Manufacturing is witnessing a decline of -4.3% which is perhaps a reflection of slowdown in exports. Mining is also declining. Agriculture segment is holding up well. 3-year CAGR shows a 2.5%, with recovery seen in all sectors. Particularly, the trade transport segment which was negative so far has moved to positive territory.

From the expenditure side, capital formation and private consumption are growing strong at 10% while government consumption is negative. Even at a 3-year CAGR level, GFCE is negative. Net trade deficit is however at a high of 8.6% closer to the levels of 8.8% seen in Q3FY13.

Output from sectors are above pre-pandemic levels and recovery is expected to be maintained. The key risks remain export slowdown driven by global headwinds.  Notably, this GDP growth is on lines of RBI’s estimate. 

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