India GDP Q2 2022

India: Economy records quickest upturn since Q2 2021 in the second quarter

GDP growth accelerated to 13.5% year on year in the second quarter, from 4.1% in the first quarter. Q2’s reading marked the best result since Q2 2021. However, the result undershot market expectations and was inflated by a base effect.

Household spending growth improved to 25.9% year on year in Q2 compared to a 1.8% expansion in Q1. Meanwhile, fixed investment growth improved to 20.1% in Q2, from the 5.1% increase logged in the previous quarter. Public spending growth was the slowest since Q1 2022, expanding 1.3% (Q1: +4.8% yoy).

On the external front, exports of goods and services increased 14.7% on an annual basis in the second quarter, which was below the first quarter’s 16.9% expansion. Conversely, imports of goods and services growth picked up to 37.2% in Q2 (Q1: +18.0% yoy).

The Q2 print suggests that the economy is continuing to rebound from the Covid-19 pandemic, setting the stage for a growth rate above the pre-pandemic average this fiscal year. However, the reading was flattered by a base effect. Compared to the same quarter in 2019—before the Covid-19 crisis—GDP was only up 3.8% in Q2 compared to 6.7% in Q1.

Analysts at Nomura expect GDP to slow sequentially in Q3:

“First, the [Covid-19] reopening-driven catch-up is nearly complete and is unlikely to sustain for long […]. Second, deteriorating global growth prospects are likely to spill over to India. […] Third, high inflation could adversely impact real incomes and weigh on rural consumption where the savings buffers are lower. And finally, although domestic financial conditions are not restrictive, they have become less accommodative, and hence should moderate the pace of growth in interest rate-sensitive sectors.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest