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  India's 4Q real GDP grew 6.1% YoY, much faster than expected

Real GDP growth is better than expected for the third successive year in FY23

In contrast to the market consensus of 5% and our forecast of 5.3%, real GDP growth was much higher at 6.1% in 4QFY23, due to which the full-year growth was 7.2%, better than the consensus of 7%.

Real consumption grew 4.7% YoY in 4Q, while real investments grew faster (at 6.9%), supported by doubling of inventories. Real GFCF growth was subdued at 4.2% in 4Q.

Nominal GDP growth was at 9-quarter low of 10.4% YoY in 4Q. Notably, domestic savings are estimated at 27% of GDP in FY23, the lowest since FY04 (when it was the same), as investments fell only slightly to 30.8% of GDP.

On yearly basis, nominal GDP grew 16.1% to INR272.4t in FY23, compared to the Budget estimate of INR273.1t.

On GVA basis, real/nominal growth was 6.5%/10.8% in 4Q and 7%/15.4% in FY23. The slight upward revision in the previous quarters of FY23 was due to community, social & personal services, partly offset by trade, hotels & transport sector.

India's growth continues to surprise positively for the third consecutive year in FY23. This, however, will change in FY24, as we expect real growth to ease, led by consumption.

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