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Below is Perspective on Q1 GDP Data for FY23 by Madhavi Arora, Lead Economist, Emkay Global Financial Services

“The GDP print for 1QFY23 was largely in line with our expectations, growing 13.5% (Emkay 13.8%; Consensus:15.5%), led by led by recovery in services sector. The strong YoY growth partly also is led by favourable base effect, as 1QFY22 growth was severely impacted by the Covid Delta wave. The GDP prints as a mixed bag , largely a story of service sector rebound which also was visible in the Pvt consumption print in the expenditure side. However, manufacturing has remained a disappointing print, while utilities have remained resilient since the pandemic normalized. The sharp uptick of around 26.7% in nominal GDP essentially reflects the higher deflator. Going ahead, we see secular downturn in the growth print ahead, as the base effect fades and the economy also slows sequentially. We maintain growth may remain at 7% for the year , albeit with the downside risk. Going ahead, even as recovery in domestic economic activity is yet to be broad-based, global drags in the form of still-elevated prices, shrinking corporate profitability, demand-curbing monetary policies and diminishing global growth prospects weigh on growth outlook.”

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