The economic activity growth was better in April 2022 than the March quarter of 2021-22 and may have remained strong even in May 2022, therefore the real GDP as well as the gross value added (GVA) growth could be 9.5 per cent each in the first quarter of the current fiscal, a report by brokerage firm Motilal Oswal Financial Services has estimated.
The estimates are based on Motilal Oswal’s in-house economic activity index (EAI).
“After a seven-month hiatus of sub-6 per cent Year-on-year growth, preliminary estimates of our in-house EAI Index for India’s real GVA (EAI-GVA) suggest a sharp uptick of 8.2 per cent year-on-year in April 2022 (compared to 5.5 per cent in March 2022), led by faster growth in both farm as well as non-farm sectors,” the firm said in the report.
It further said that the EAI-GDP also grew at an eight-month high of 9.1 per cent year-on-year (compared to 7.7 per cent year-on-year in March 2022) driven by strong investments and private consumption expenditure.
EAI-GVA details suggest that the farm sector grew 7.6 per cent year-on-year in April 2022 (versus 2.3 per cent year-on-year in March 2022), the Motilal Oswal report noted.
Besides, even the non-farm sector grew at an eight-month high of 8.2 per cent year-on-year, fuelled by faster growth in both services and industrial activities.
Investments, conversely, grew sharply by 10.6 per cent yer-on-year in April 2022, more-than-double the growth of 5.4 per cent year-on-year seen in March 2022, the report said.
According to the report, a monthly analysis of select indicators for May2022 indicated a continued pick-up in economic growth.
A majority of the indicators – PMI services, toll collections, Vaahan registrations, Google mobility, imports and power generation – posted faster growth in year-on-year terms.
“Overall, our in-house estimates suggest that the economic activity growth was much better in April 2022 than in March quarter of 2021-22. Moreover, it seems to have remained strong even in May 2022. Therefore, we believe that real GDP/GVA growth could be 9.5 per cent each in first quarter of 2022-23, lower than the market consensus of 14 per cent and 13.5 per cent, respectively,” the report said.