India GDP news: Govt pegs India’s FY22 GDP growth at 8.7%; Here are the key highlights

The Indian economy’s growth moderated to 4.1% on an annual basis in the last quarter of the previous fiscal while the growth rate for FY22 has been pegged at 8.7%, government data showed on Tuesday.

India’s gross domestic product (GDP) had contracted by 6.6% in FY21. The expansion in gross value added (GVA) meanwhile, has been pegged at 3.9% in year-on-year (YoY) terms. Analysts had estimated India’s real GDP to grow around 5% YoY in Q4FY22 & a 9% GDP growth in FY22.

Here are the key highlights:

  • Real GDP is estimated to have grown 8.7% in FY22 after contracting 6.6% in the previous fiscal. Nominal GDP saw a growth of 19.5% in FY22 after contracting 1.4% in FY21.
  • Real GVA grew 8.1% in FY22 after contracting 4.8% in FY21. Manufacturing GVA contracted 0.2% while trade, hotels, transport, etc grew 5.3%. Mining and quarrying registered a growth of 6.7% in Q4FY22 after contracting 3.9% in Q4FY21. Overall in FY22, it grew 11.5% against a contraction of 8.6% seen in FY21.
  • The private final consumption expenditure (PFCE), which forms the biggest chunk of the GDP, saw a marginal growth of 1.77% in the final quarter The growth of private consumption in Q3 has been revised to 7.45% from 7% previously.
  • The Gross Fixed Capital Formation (GFCF) grew 5.1% on an annual basis in Q4 after growing 2% in the previous quarter. The GFCF forms the second-biggest chunk of GDP.
  • The Government Final Consumption Expenditure (GFCE), which grew 3.4% in Q3FY22, registered a growth of 4.8% in Q4.
  • In Q4FY22, exports grew 16.85% on a year-on-year basis while imports grew 18%. In Q3FY22, exports had grown 23.12% while imports had grown 35.17%.

“The deceleration in GDP growth in Q4 is on expected lines. The contraction in the manufacturing sector – which struggled with supply bottlenecks and high input prices- in the last quarter of FY22 is a cause of concern. The other concerning aspect is the reduction in consumption to GDP ratio in the fourth quarter of FY22, even while the investment to GDP ratio has bounced back. Going forward, India’s economy will continue to feel the heat of global volatility and uncertainties,” Rajani Sinha, Chief Economist, CareEdge said.

“High input prices will continue to negatively impact manufacturing sector. Services is expected to see a bounce back in FY23 with a return to economic normalcy. However, in services sector, some segments like the Information Technology would feel the pinch of slowing in US economic growth. Factoring for the uncertain economic environment, we expect India’s GDP to grow by 7-7.5% in FY23,” she added.

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