State Bank of India (SBI), Moody’s Investors Service and Goldman Sachs have revised downward their annual growth forecasts.
While SBI revised its GDP growth estimate to 6.8% from 7.5%, citing ‘the way below GDP numbers for the first quarter,’ Moody’s forecast 7.7% growth, against 8.8%. It cited rising interest rates, uneven monsoon and slowing global growth.
The National Statistical Office on Wednesday released the Q1 GDP numbers which showed growth of 13.5%, pulled down by a poor show of the manufacturing sector, which logged a paltry 4.8% expansion in the first three months of FY23.
Goldman Sachs lowered the current fiscal year estimates by 20 basis points from 7.2%.
“We are now revising our annual GDP growth for FY23 to 6.8%, mostly due to a statistical adjustments, but growth is likely to show an increasing momentum in the second half,” SBI group chief economic adviser Soumya Kanti Ghosh said.
“Our expectation that real GDP growth will slow from 8.3% in 2021 to 7.7% in 2022 and decelerate further to 5.2% in 2023 assumes rising rates, uneven distribution of monsoon, and slowing global growth will dampen economic momentum sequentially,” Moody’s said.
“Despite the main drivers of domestic demand coming in line with our expectations, a large drawdown in inventories and statistical discrepancies came as a surprise,” said Santanu Sengupta, India economist at Goldman Sachs.
Separately, Morgan Stanley’s India economist Upasana Chachra said there was a 40 basis points downside risk to its FY23 growth estimate of 7.2%.
Morgan Stanley sees 40 bps downside risk to growth estimate
