Crisil cuts FY23 GDP growth outlook to 7%, cites global slowdown

July-September expansion to halve to 6.5%, from 13.5% in Q1

November 21, 2022 07:44 pm | Updated 08:29 pm IST - NEW DELHI

Photo used for representation purpose only.

Photo used for representation purpose only. | Photo Credit: Getty/iStock

Rating agency Crisil on Monday pared its 2022-23 real GDP growth forecast to 7%, from 7.3% estimated earlier, and said it expects the Indian economy to face more stress in 2023-24 with growth likely to slow to 6% due to the global slowdown and tightening financial conditions at home.

While decelerating global growth has started to impact India’s exports and industrial activity, Crisil reckoned that this year’s growth would be propped up by domestic demand, led by a catch-up in contact-based services activity, government capital spending, and an ‘overall normal monsoon for the fourth time in a row’.  

In 2023-24, the gloomier global outlook will spill over to India as well, the firm said, even as domestic demand could come under pressure as interest rate increases gets transmitted more to consumers, and the rebound in contact-based services fades. Crisil had earlier pegged next fiscal’s expansion at 6.5%.

“Industrial activity in India has begun to feel the tremors”, Crisil noted, citing a slowdown in exports since July, which has also affected domestic industrial momentum. It expects inflation to average 6.8% this year, before easing to 5% in 2023-24.  

Q2 growth

Agencies including Crisil and ICRA Ratings, expect the second-quarter growth to halve to 6.5%. Bank of Baroda economist Jahnavi Prabhakar also expects the Q2 expansion to sequentially slow to 6.5%, citing an ‘across the board moderation in sectors owing to the base effect’.

Official estimates for the economy’s Q2 performance are expected to be released at the end of November.

Top News Today

Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.