Favourable base along with pick-up in services sector to buoy growth print
India's GDP growth in Q1 FY23 is expected to come between 15%-16% on an annualized basis amidst support from a favourable statistical base due to the adverse impact of the disruptive Delta Covid wave in the previous year along with continued recovery in the services sector aided by pent-up demand (especially in sectors such as tourism, hospitality), normalized personal mobility and an expansive vaccination coverage. This is also corroborated by AMEP index (Acuité Macroeconomic Performance index) which averaged at a post pandemic high of 128.5 in Q1 FY23 from 117.1 in Q4 FY22. Out of the spectrum of 16 indicators tracked by the index, services sector indicators recuperated somewhat at a faster clip than the manufacturing segment.
Says Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research Ltd "Our 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 reflects resilience and a gradual pickup in services sector as well as domestic private consumption despite inflationary headwinds and the global slowdown. This makes up optimistic about a GDP growth print of over 7.0% in FY23. On the other hand, a few high frequency indicators such as rail freight, exports and diesel consumption have shown a lack a steady and sustainable momentum, leading to moderate downside risks to that forecast."
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