MUMBAI:  According to an ICRA estimate, due to a low base and a strong recovery in the contact-intensive industries as a result of expanding vaccination coverage, GDP growth is predicted to increase by double digits at 13 percent in Q1FY23. The gross value added (GVA) at basic pricing is anticipated to increase to 12.6 percent in Q1FY23 from 3.9 percent in the previous quarter.

ICRA anticipates that the services sector will lead sectoral growth in Q1 FY2023 (+17-19 percent; +5.5 percent in Q4 FY2022), followed by the industrial (+9-11 percent; +1.3 percent). In contrast, it is expected that the GVA growth in agriculture, forestry, and fishery will slow to 1.0 percent in Q1 FY2023 from 4.1 percent in Q4 FY2022, due to the negative effects of the heat wave that affected some regions of the country and reduced wheat yield.

Since the beginning of FY2023, the recovery in travel-related services has been positive, fueled by penned-up demand for corporate travel and rising confidence in using leisure services despite the trajectory of Covid-19 infections declining. Besides, the railway and road sub-sectors of the transportation industry are anticipated to exhibit a robust rebound in Q1 FY2023, as shown by the robust YoY growth in rail freight and GST e-way bills.

ICRA anticipates a base-effect driven rise of 40 to 45 percent in the GVA of trade, hotels, transport, communication, and services connected to broadcasting in Q1 FY2023 (+5.3 percent in Q4 FY2022), although trailing the pre-Covid level of Q1 FY2020 by a modest 2.5 percent.

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