GDP expands 6.1% in Q4: Read top brokerages views on the road ahead

India remains the fastest-growing major economy for the second year running, after clocking 9. 1% in 2021-22.

The Indian economy grew 6.1 percent in the January-March quarter (Q4) of the last fiscal to Rs 43.6 lakh crore that took the growth rate for 2022-23 to 7.2 percent, or Rs 160.06 lakh crore — a notch higher than both Reserve Bank of India (RBI) and private projections.

Asia’s third-largest economy remains the fastest-growing major economy for the second year running, after clocking 9.1 percent in 2021-22.

Notably, a stable current account deficit, rising foreign exchange reserves, and inflation coming to an 18-month low of 4.7 percent are positives for the economy. However, a below-normal monsoon impacting agriculture as well as volatile global commodity prices due to geopolitical uncertainties fuelling inflation pose some of the risks.

Factors

The unexpected surge in the GDP numbers is due to a better-than-expected performance in the last quarter of the fiscal, and boosted by services, exports, and agriculture. The latest print upholds RBI governor Shaktikanta Das who, on May 24, said that the 2022-23 GDP numbers could end up being higher than the projected 7 percent figure.

“The 2022-23 GDP growth figures underscore the resilience of the Indian economy amidst global challenges. This robust performance along with overall optimism and compelling macro-economic indicators, exemplify the promising trajectory of our economy, and the tenacity of our people,” Prime Minister Narendra Modi wrote in a tweet.

Deloitte India economist Rumki Majumdar said the GDP numbers were “pleasantly surprising but not completely unexpected ... the rebound in manufacturing is the cherry on top since the modest recovery in the sector was a concern for policymakers.”

Here are the reactions to India’s GDP data filed by various brokerage firms: 

JPMorgan

We raise FY24 growth estimate to 5.5 percent from 5 percent

Global growth momentum is still expected to slow in coming quarters

Impact of monetary policy normalisation will be felt with a lag

Upside risks will emerge if strong increase in budgeted capex seen in FY24

Citi 

Q4 GDP growth has prompted us to revise upwards FY24 real GDP forecast

FY24 real GDP forecast increased to 6.2 percent from 5.9 percent

We lower our nominal GDP growth forecast to 10 percent

Favourable for a longish ‘Pause’ from RBI than a quick pivot to an easing cycle

CLSA 

Our shallow recovery call is now a reality

Q4 growth did surprise at 6.1 percent vs our estimate of 5.1 percent

We see FY24 GDP growth slowing to 5.5 percent in FY24, in-line with H2FY23’s 5.3 percent

Even if Fed pauses at 5.25 percent, RBI won’t be able to cut till October

El Nino is a new risk that poses 25 bps downside growth risk

Morgan Stanley 

We expect growth to track above 6 percent over the next two years

Find trends in incoming data consistent with our view of GDP at 6.2 percent in FY24

Confluence of cyclical and structural tailwinds is driving the recovery