The country's economic growth may come down to 5.5 percent in the third quarter of the current financial year i.e. October-December due to weak demand amid an aggressive increase in the policy rate (repo rate) by the RBI. The government will release the GDP figures for the third quarter on Tuesday. The growth rate in the second quarter of 2022-23 was 6.3 percent.
Economists say that the central bank has increased the repo rate by 2.50 percent since May 2022 to control high inflation. This has increased the monthly installment (EMI) of the people and affected their spending capacity. Business activities have also slowed down. This has resulted in weakness on the demand and consumption front, the impact of which can be seen in the third quarter GDP figures. Barclays India Economist Rahul Bajoria said credit disbursements have slowed down due to higher interest rates amid global uncertainty. Despite some respite, inflation is still high. There is a possibility of its impact on the growth rate.
These factors will also affect the pace of economic growth
Sakshi Gupta, the chief economist at HDFC Bank, said, "Amid fears of a recession, the slowdown in business activity is likely to impact manufacturing."
The economy is also expected to get less support from the agriculture sector.
The performance of 12 out of 14 high-frequency indicators of the services sector is likely to be weaker in Q3 of 2022-23 than in Q2.
Upasana Chachra, the chief economist, at Morgan Stanley India, said exports have declined in recent months. Consumer demand has also weakened. Due to this, the GDP growth rate in the third quarter may remain low.
Estimates of other agencies
agency growth rate
SBI 4.6 per cent
RBI 4.4 percent
Barclays 5.0 percent
Yes Bank 5.5 percent
ICICI
Securities 4.7 percent
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