The first quarter's Gross Domestic Product (GDP) reading of 13.5 percent missed estimates by economists and brokerage houses alike. Most had factored in a reading of 15-15.5 percent and the Reserve Bank of India itself was projecting growth of 16.2 percent.
In an interview with CNBC-TV18, Abhishek Upadhyay of ICICI Sec PD, Pronab Sen, Former Chief Statistician, Samiran Chakraborty of Citi and Rob Subbaraman of Nomura discussed what the reading tell us about the hidden weaknesses of the economy. Is the strength in domestic consumption strong enough to improve the coming quarters? Or will the coming quarters be worse because of the global slowdown?
According to Subbaraman there are downside risks to the Indian gross domestic product (GDP) growth rate.
“There are clear downside risks to India's GDP growth forecast for 2023, which is currently 4.7 percent. I think this GDP number just came out for India, I don't want to sugarcoat it. I think that is as best as it gets. I think it's slowing down from here,” he said.
Samiran Chakraborty too believes that the India growth story is slowing down to some extent.
"Global growth is going to slow down even faster affecting our export volumes, that is going to be a critical driver. But at this moment, we have been slightly optimistic in forecasting that for the next few quarters, the headwind from these net exports will not be as sharp as it was in the first quarter,” he explained.
According to Sen, the impact of rate tightening has not been factored in yet.
“We really should be cautious about over projecting what the Indian economy is doing. And we have not yet factored in what going to the effects of the tightening of monetary policy. At the moment, it doesn't seem to have had much effect, but sooner or later it will,” he said.
For the entire discussion, watch the accompanying video
(Edited by : Abhishek Jha)
First Published: Sept 1, 2022 3:32 PM IST
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