Q4 GDP Numbers Beat Estimates, Say Experts

The Q4 nominal GDP came in at 6.1%, higher than the previous quarter's number of 4.4% and for the full year FY2022-23 it was 7.2 % as compared to 9.1% in FY2021-22 as per the government data release on Wednesday. The full year GDP number was a tad higher than the street estimates.

Several market economists and industry experts have given their views on it. Here's a look at what they have to say about these numbers.

Nish Bhatt - Founder & CEO, Millwood Kane International on GDP data

The Q4, as well as FY23 growth rate, has been higher than most estimates. This growth has been despite interest rates at a two-decade high, the central bank withdrawing liquidity, and concerns around global growth. while Agriculture, mining, manufacturing, electricity, and construction component pushed up the overall growth rate, the slowdown in private consumption and public expenditure was a drag on the growth rate. Overall slowdown in imports and a trade surplus also played a role in the higher growth rate.

This release of the data is timely as the central bank will be announcing its monetary policy in a week. This will encourage a status quo policy on the rate as well as the policy stance. Going forward, a good monsoon year, global growth, and the geopolitical situation will provide further cues on growth.

Ritika Chhabra - Quant Macro Strategist, Prabhudas Lilladher PMS

The Q4 growth number is a big surprise. In particular, on the production side, agriculture growth at 5.5% is much better than expected, despite the unseasonal rains we saw in the Jan-March period. The services growth has come on expected lines, supported by robust growth in trade, hotels, and financial services.

On the expenditure side, the major contributor to the growth is capital formation (at 8.9%) driven by investment expenditure by the government. However, a mere 2.8% growth in private consumption expenditure indicates waning private sector demand, which is a concern.

Anitha Rangan - Economist at Equirus

India FY23 GDP came in at 7.2%, much higher than the street estimate of sub-7% and the second advance estimate of 7%, indicating that India's 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 estimated while government consumption is slower. Net exports were also better than expected. This is again a reflection of on-ground activities wherein domestic demand is resilient, and the government continues to heavily lift the capex spending while the 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 the 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 this year and beyond.

Madhavi Arora - Lead Economist, Emkay Global Financial Services

The better than expected GDP print for 4QFY23 is helped by healthier capital formation and more importantly, net exports which appear to be not-a-drag on growth, as usually seen in the cost given India is a net importer.

However, weaker private consumption is still a worry albeit looks a bit difficult to fathom, when one compares the robust value-added growth of consumption sectors like trade, Hotels, Transport, and Communication services.

Another anomaly was a big discrepancy print in Q4GDP along with the big gap between GDP and GVA growth, with GVA growth outdoing GDP by a wide margin, depicting net indirect taxes (adjusted for subsidies) de-grew. That said, overall a healthy growth print augurs well and also validates the fact that India's growth momentum is sustained well in FY23.