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Below is Perspective on Q1 GDP data from Mr. Nikhil Gupta, Chief Economist at Motilal Oswal Financial Services

“India's 1QFY22 real GDP grows 20.1% YoY, marginally lower than Our/Bloomberg  expectation of 21%

 Following a fall of 24.4% YoY in 1QFY21, real GDP grew 20% YoY in 1QFY22, implying a decline of 9% v/s 1QFY20. This is the worst compared to other major nations (exhibit attached).

While the headline growth was close to the forecast, the internals were not. Industrial sector grew faster than expected, while services sector, especially trade, transport & hotels, lagged.

From expenditure approach, private consumption grew faster than expected, while investments were broadly in line. Within investments, while household and states' capex growth weakened last quarter, corporate and center's capex grew faster.

Overall, there were no major surprises from the policy perspective. Focus will shift to the recovery in July and coming months. With lower base effect, we expect real GDP growth to weaken towards 7-8% in 2QFY22. Overall, we maintain our forecast of ~9% growth in the full-year FY22.

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