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Below are Perspective on the GDP Numbers for Q2 FY-23 Mr. Nikhil Gupta, Economist - Institutional Equities, Motilal Oswal Financial Services Ltd

Unexpected deterioration in manufacturing sector drags down 2QFY23 GVA growth

Real GDP growth of 6.3% YoY broadly in line with expectations

-- India grew 6.3% YoY in 2QFY23, broadly in line with the market consensus. PVR consumption and investments grew strongly at 9.7%/9.2% but government consumption declined.

-- Real GVA growth of 5.6%, however, was weaker. Interestingly, services and farm sectors grew faster than expected, while manufacturing contracted unexpectedly in 2Q.

-- Further, implied gross domestic savings were just 26.2% of GDP in 1HFY23, the lowest in 19 years (in 1H of all years). High inflation has pulled down savings, supporting consumption/growth.

-- Going forward, real GDP growth is likely to be ~4.5% YoY in 2HFY23, leading to ~7% growth in FY23.

-- Today's data is unlikely to influence RBI monetary policy. Though the consensus is a hike of 35bps on 7th Dec, a 50bp hike cannot be ruled out. US payroll data on 2nd Dec will be a decider.

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