First official data print on GDP growth for the fiscal beats the street; expect some softening from here

Big picture

• The National Statistical Office’s (NSO) just-released first advance estimates project India’s real gross domestic product (GDP) growth at 7.3%1 on-year for this fiscal, marginally higher than 7.2% in the previous one
• It estimates that growth was stronger in the first half (7.7%) compared with the second (6.9%)
• Despite weak agricultural growth, overall GDP growth is seen as robust, indicating that the surge in non-agriculture sectors has more than offset the agricultural slowdown.
• Nominal GDP is estimated to slow to 8.9% this fiscal compared with 16.1% previous year. This is lower than 10.5% estimated during Budget 2023.
• Moderation in real GDP growth, coupled with a sharp slide in GDP deflator (1.4% on-year this fiscal versus 8.2% previous year) are behind slowdown in nominal GDP. WPI inflation has declined significantly this fiscal (-1.3% in April-November 2023), which drove the fall in GDP deflator.