Informist Poll:Fading base effect may drag Jul-Sep GDP growth to 6.3%

Informist, Monday, Nov 28, 2022


By Aditya Saroha and Priyansh Verma


NEW DELHI – Growth in the Indian economy likely slowed to 6.3% in Jul-Sep from 13.5% a quarter ago, largely due to fading away of the statistical effect of a low base, according to an Informist poll of 23 economists.


At 6.3%, the GDP growth rate will be in line with the RBI's projection for the quarter.


India's GDP had grown 8.4% in the second quarter last year, but it came on top of a 6.6% contraction in the year before.


If the economy grows at 6.3% in Jul-Sep, as predicted, the GDP, in absolute terms, will be 7.6% higher than the same quarter before the pandemic.


According to the poll, the growth in the gross value addition in Jul-Sep is seen falling to 5.3% from 12.7% a quarter ago.


The National Statistical Office is scheduled to release the GDP data for the September quarter at 1730 IST on Wednesday.


Economists attributed the growth in Jul-Sep to a robust demand for contact intensive services, pre-festival season stocking, and healthy government spending.


"Revival of contact intensive services, consumption demand and public investment supported growth in Jul-Sep," said Dharmakirti Joshi, chief economist at CRISIL.


The S&P Global services purchasing managers' index averaged 55.7 in Jul-Sep, up from 52.4 in the corresponding period of the last year but lower than 58.7 in Apr-Jun.


Nine out of 16 services sector high frequency indicators reported a double-digit year-on-year expansion in the September quarter, according to ICRA.


"The big question is whether the GDP data is consistent with the strength in high frequency data, after a puzzling negative surprise in the first quarter," said Abhishek Upadhyay, a senior economist with ICICI Securities Primary Dealership.


Economists expect industry sector to be a laggard in Jul-Sep.


Factory output, based on the Index of Industrial production, grew 1.5% in Jul-Sep compared with 12.8% in Apr-Jun. The lacklustre growth in production could be partly attributed to high input costs. The wholesale price inflation had averaged 12.4% in Jul-Sep.


The agriculture sector growth is also likely to be subdued in the quarter on account of lower output of kharif crops. According to the agriculture ministry estimate, kharif output of foodgrains and oilseeds is likely to contract 3.9% and 1.3% on year, respectively. Private consumption also showed a significant year-on-year rise as reflected by several indicators.


Passenger vehicle sales, an indicator of urban demand, rose 38% to 1.03 mln units in Jul-Sep on strong demand during the festival season. Two-wheeler sales, a proxy for rural demand, was up 13% on year to 4.67 mln units.


Moreover, the Reserve Bank of India's latest bi-monthly Consumer Confidence Survey pointed towards an improvement in consumer spending in July and September compared with the previous year's corresponding period.


The central bank, which has raised policy repo rate by 190 basis points since May, is widely expected to increase the repo rate by 35 bps on Dec 7 to tame retail inflation, which has remained above the upper band medium-term inflation target range of 2-6% since January.


The following is the summary of the poll by Informist on GDP growth for Jul-Sep:


Mean: 6.2%

Median: 6.3%

Mode: 6.5%



Forecast for Jul-Sep GDP growth 

Sunidhi Securities4.1%
State Bank Of India5.8%
Bank of America Securities6%
ICICI Securities Primary Dealership6.1%
Societe Generale6.1%
Care Edge6.2%
Deutsche Bank6.2%
ICICI Bank6.2%
Kotak Mahindra Bank6.2%
Standard Chartered Bank6.2%
HDFC Bank6.3%
QuantEco Research6.3%
STCI Primary Dealer6.3%
Yes Bank6.3%
Equirus Group6.4%
IndusInd Bank6.4%
Axis Capital6.5%
Bank of Baroda6.5%
DBS Bank6.5%
Motilal Oswal Financial Services6.5%




Edited by Akul Nishant Akhoury



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