Govt expects FY23 GDP growth at 7%

Nominal GDP growth this fiscal may slow to 15.4% from 19.5% a year ago

- Saurav Anand & Rituraj Baruah

India's economic growth may slow to 7% in FY23 from 8.7% in the previous year, the National Statistical Office (NSO) said, as the war in Europe and rising interest rates globally hit demand in India and abroad.

Nominal GDP growth in FY23 is estimated to also slow to 15.4% from 19.5% in the previous fiscal, according to the NSO's first advanced estimates for the current fiscal year.

The government uses the NSO's estimate to formulate its spending and growth plans for the Union budget, which finance minister Nirmala Sitharaman is set to announce on 1 February.

This will be the last full-year budget before the current government's term ends. The national elections are due in the first half of 2024.

According to the NSO's estimates, agriculture may grow 3.5% against 3% in FY22, while manufacturing is likely to slow to 1.6% from 9.9% and mining from 11.5% to 2.4%.

Meanwhile, the services sector is expected to pick up pace. Electricity, gas, water supply and other utility services are expected to grow at 9% in FY23 from 7.5% in the previous year. Trade, hotels, transportation, communication and broad-casting services are expected to grow 13.7% from 11.1% in FY22.

Similarly, financial, real estate, and professional services are seen growing at 6.4% in FY23, against 4.2% in FY22.