India Economy Registers 4.1% Growth in Q4 FY23: Resilient Recovery
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India’s economy displayed remarkable resilience as it achieved a growth rate of 4.1% in the fourth quarter (Q4) of the financial year 2022-23 (FY23). This encouraging data was released by the National Statistical Office (NSO) on May 26, 2023.
Q4 Growth and Comparisons In India
The Q4 growth of 4.1% slightly lagged behind the 5.4% growth recorded in the preceding quarter of FY23. However, the overall growth for FY23 stood at an impressive 8.7%, surpassing the 8.1% growth achieved in FY22.
Sector-wise Performance
The driving force behind the Q4 growth was the stellar performance of the manufacturing sector, which witnessed a robust expansion of 7.3%. The services sector also contributed significantly with a growth rate of 4.5%, while the agriculture sector displayed resilience with a growth rate of 2.3%.
Factors Supporting Q4 Growth
Several factors played a pivotal role in supporting the Q4 growth trajectory. These included a resurgence in investment activity, a decline in inflationary pressures, and a remarkable rebound in the country’s exports.
Challenges Faced in Q4
Despite the overall positive growth, the Q4 expansion encountered challenges stemming from the ongoing conflict in Ukraine. The ramifications of the conflict, such as elevated commodity prices and disruptions in global supply chains, influenced the growth rate.
FY23 Growth Outlook
Despite the challenges faced, the overall growth rate for FY23 surpassed that of the previous fiscal year. This achievement can be attributed to various factors, such as a strong resurgence in economic activity following the second wave of the COVID-19 pandemic, increased investment momentum, and a decline in inflationary pressures.
Future Growth Outlook
For the upcoming financial year, FY24, the government has set a growth target ranging between 8% and 8.5%. However, the growth outlook for FY24 remains uncertain due to ongoing challenges, including the war in Ukraine and the rising interest rates in the United States.
The resilience exhibited by India’s economy in the face of challenges highlights its robustness and adaptability. The growth rate of 4.1% in Q4 FY23 showcases a promising recovery, instilling optimism for the country’s economic prospects in the future.
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