Better Than Expected Q4 GDP Testimony To India's Resilience: Economist

India FY23 GDP came in at 7.2%, much higher than street estimate of sub-7% and second advance estimate of 7%, indicating that India growth despite external headwinds is going strong. GVA alongside came in at 7%. From the industry side, the revision comes from better-than-expected agriculture output and mining and an upward revision in manufacturing with some revival in Q4 manufacturing, perhaps led by net exports showing some upside (lower oil, rupee weakness).

From the expenditure side, the upside is from private consumption and capex which are higher than estimate while government consumption is slower. Net exports was also better than expected. This is again a reflection of on-ground activities wherein domestic demand is resilient, and government continues to heavy lift the capex spending while government is trying to cap its revenue spending consciously to curtail fiscal deficit.

Overall, better than expected GDP data is again a testimony of India's economic resilience when rest of the world is on a recession or slowdown path. While external headwinds continue to persist, India is likely to remain the shining star into this year and beyond.

(The author Anitha Rangan is Economist at Equirus)