Q1 GDP growth estimated at 14-15% thanks to the recovery of services

India’s economy likely grew by 14-15% in the first quarter of the current fiscal year, driven by a recovery in contact-intensive sectors, although the rest of the economy held firm despite multiple winds opposites, according to a survey of economists. While uncertainty still looms, economists say the worst may be over.

First quarter GDP data will be announced on August 31.

The median estimate in the poll of 10 economists was 14.43%. He pegged FY23 growth at 7.2-7.6%. The Reserve Bank of India (RBI) forecasts GDP growth of 16.2% for the first quarter and 7.2% for the year.

Large scale improvement

The low base of the pandemic-affected first quarter last year would have amplified first-quarter growth this year.

High-frequency indicators released during the first quarter show there is a recovery in economic activity despite global headwinds, chief economist Abheek Barua said.

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The recovery of contact-intensive sectors such as travel, cinemas and restaurants, among others, as the pandemic subsided, supported the economy even as high inflation weighed on some consumer sectors. .

Nomura said the improvement in high-frequency data was widespread across consumption, investment, industry and the external sector, although exports started to struggle.

“Overall, we expect sequential momentum to remain strong in the first quarter of FY23,” said Aurodeep Nandi, Indian economist and vice chairman of Nomura.

High commodity prices, high inflation and rising interest rates have shaken confidence, but the impact in the June quarter was limited.