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Below is Perspective on Q2 FY23 GDP Data By Mr. Vivek Rathi, Director Research, Knight Frank India.

6.3% GDP growth witnessed in Q2 FY23 was primarily supported by resilience in private consumption despite increasing inflation and headwinds from global spill overs. Although, inflation averaged significantly high at 7% during the quarter, the domestic consumption remained strong, as seen in 9.7% of growth in private consumption which accounts to nearly 60% of the GDP. Industry wise the revival in the service sector which includes Financial services, Real estate, trade, hotels, transport, communication etc. accounting for 59% of the overall GVA grew by 9.3% and thus, has supported growth in Q2 FY23. However, the drag in economic growth is emerging from widening trade deficit due to global slowdown.

In the coming months, sustained resistance in the domestic consumption would continue to support India’s economy. Inflation and rising borrowing costs have so far not deterred the consumption as witnessed in significant growth in retail and personal loans.

The sustenance of strong domestic economic fundamentals is favourable for the real estate sector. Despite a faster rise in the borrowing cost, (about 100 to 130 bps in a span of 7 months), the residential sales have continued to remain strong even post festive season. We expect the momentum to continue supported by strong macro-economic fundamentals and positive consumers sentiment towards home ownership.

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