First-quarter growth in double digits is predicted as the economy battles through Covid to complete recovery

India is expected to declare that the country’s economy expanded by double digits in the first quarter of its fiscal year, primarily as a result of the base effect but also because of increased demand and consumer spending. Analysts predict that India’s GDP increased by up to 16% year over year in the April–June quarter as the country’s economy fully recovered from Covid-led restrictions. India’s GDP is predicted by SBI Research to increase by 15.7% year over year in the first quarter. According to the analysis, growth is anticipated to be about 15.7% with a strong likelihood that it would be positive due to a number of indications that show the Indian economy is making progress.

According to Barclays, in the April through June quarter, India’s economic growth advanced to 16% year over year. The company predicts that India’s economy would fully recover from COVID in the current quarter, with the services sector open to all businesses, trade activity at its high, and domestic demand remaining robust. According to Ritika Chhabra, economist, and quant analyst at Prabhudas Lilladher, “We forecast GDP to rise by 14%–14.5% year-on-year in Q1 FY23 supported by the low base and strong domestic demand.” A widespread uptick in investment, services industry, and consumption was seen.

Statistical base and continued recovery in the services sector aided by pent-up demand, especially in sectors like tourism and hospitality. Growth is also anticipated to be aided by increased immunization rates and normalized personal mobility. The GDP data is scheduled to be released today after the market close.

Acuité Macroeconomic Performance index (AMEP) index provides mixed signals on economic growth in the current fiscal; beyond the base factor, the double-digit annualized growth nos for most macro indicators reflect resilience and a gradual pickup in the services sector as well as domestic private consumption despite inflationary headwinds and the global slowdown, according to Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research.

We are positive about a GDP growth report of above 7.0% in FY23 as a result of this. However, a few high-frequency indicators, including rail freight, exports, and diesel consumption, have demonstrated a lack of consistent and durable momentum, raising moderate negative risks to that forecast, he added.

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