The apparent slowdown in India's GDP growth in the October-December quarter has been driven to a large extent by revisions to past data, economists said, adding that the growth is evolving on expected lines and may not sway the central bank to pause rate hikes.
The level of output at the end of December 2022 was 11.6% higher than the pre-pandemic 2019 quarter, said Bhandari. This is an improvement from September, when output was 9.4% above the comparable pre-pandemic quarter, she added.
The sequential real GDP growth of 3.5% was higher than the 3.3% average growth for Q3 in pre-Covid years, Samiran Chakraborty, chief economist for India at Citi, wrote in a note.Services outpacing manufacturing activity, and investments leading consumption remain the dominant narrative, economists at QuantEco Research said.
Private consumption in the third quarter rose only 2.1% from a year earlier, a steep fall from the 8.8% growth seen in the second quarter. Private consumption growth between December 2019 and 2022 was at 14.8%, compared to a 15.2% growth between September 2019 and 2022, HSBC's Bhandari pointed out.Among the key sectors, manufacturing shrank 1.1% in the third quarter, following a contraction of 3.6% in the previous three months. The sector would have grown by 3.8% in the third quarter without a revision in data, said Nageswaran.
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