India’s GDP growth decelerates to 4.4 pc in Q3FY23, services sector continues robust revival

"GDP at Constant (2011-12) Prices in Q3 2022-23 is estimated at Rs 40.19 lakh crore, as against Rs 38.51 lakh crore in Q3 2021-22, showing a growth of 4.4 percent," MoSPI said.

The GDP at current prices in Q3 of the current fiscal is estimated at Rs 69.38 lakh crore, as against Rs 62.39 lakh crore in the corresponding period of the previous year showing a growth of 11.2 pc.

While the services sector continued a strong recovery during the third quarter, the manufacturing sector remained subdued. In the October-December period, the farm sector grew at 3.7 pc as compared to 2.4 pc in Q2.

The manufacturing sector contracted 1.1% during this period compared to a 3.6% decline in Q2.

Labour-intensive construction sector recorded 8.4% growth in Q3FY23 as compared to 5.8% in the previous quarter.

Trade, hotel, transport, communication & services related to broadcasting grew 9.7% in Q3FY23 as compared with 15.6% in the previous quarter. Financial, real estate, and professional services grew 5.8% in the October-December quarter as compared to 7.1% in the preceding quarter.

"Given the normalising base, in our assessment, growth relative to the respective pre-Covid quarter is a more meaningful metric than the YoY (year-on-year) expansion. Growth relative to the pre-Covid level rose quite appreciably to 11.6% in Q3 FY2023 from 9.4% in Q2 FY2023, indicating an improved albeit stubbornly uneven recovery," said Aditi Nayar, Chief Economist at research and rating firm ICRA.

Commenting on Q3 numbers, Nish Bhatt, Founder & CEO, of Millwood Kane International said the data looks optically lower but the fact it is coming on a revised higher base than last year is encouraging.

"Low private consumption has been primarily responsible for the lower GDP print coupled with lower government spending and a contraction in manufacturing. Construction, Realty & Finance, trade, and hotel components provided support to the data," Bhatt said.

The government data showed India's real GDP in the year 2022-23 is estimated to attain a level of Rs 159.71 lakh crore, as against the First Revised Estimate of GDP for the year 2021-22 of Rs 149.26 lakh crore.

"The growth in GDP during 2022-23 is estimated at 7.0 percent as compared to that of 9.1 percent in 2021-22," the MoSPI said.