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Head of Research at UOB Group Suan Teck Kin, CFA, reviews the growth prospects for India.

Key Takeaways

“India’s real GDP growth slowed further to 4.4% y/y in the Oct-Dec quarter (3QFY22-23), against 6.3% y/y in the prior quarter (2QFY22-23) and 13.5% pace in the Apr-Jun quarter (1QFY22-23). The outcome fell short of our call of 4.5% and consensus view of 4.7%.”

“Private spending and investment were the two key growth drivers, accounting for more than 90% share of the 4.4% expansion and have increasingly been weighed down by the central bank’s aggressive rate hikes in the past year. On the supply side, manufacturing output shrank for the second quarter, but were offset by a robust services sector.”

Outlook – With activities expected to moderate even further ahead, we project growth rate of 6.9% in FY22-23 (from 9.1% in FY21-22) and keep the FY23-24 GDP forecast at 6.5%. The next key event to watch will be RBI’s monetary policy decision on 6 Apr.”