Goldman Sachs has revised lower its growth projections for India after the April-June quarterly gross domestic product readings missed market estimates.
The lower-than-expected growth during April-June created downside risk of 40 basis points to current fiscal year growth estimates, Morgan Stanley said in a note.
India’s real GDP growth increased 13.5 per cent year-on-year in the reported quarter, below the 15.2 per cent forecast by economists polled by Reuters.
“The reading was materially below our expectations,” said Santanu Sengupta, India economist at Goldman Sachs. Sequentially, GDP growth momentum declined to -3.3 per cent quarter-on-quarter after expanding 0.5 per cent in the Jan-March period, Mr Sengupta pointed out.
“Despite the main drivers of domestic demand coming in line with our expectations, a large drawdown in inventories and statistical discrepancies came as a surprise.”
The research house cut the full-year 2022 GDP growth forecast to 7 per cent from 7.6 per cent and also lowered the current fiscal year estimates by 20 basis points from 7.2 per cent.
The slightly weaker-than-expected growth in investments and higher drag from net exports contributed to India’s GDP falling short of forecasts, Morgan Stanley’s India economist Upasana Chachra said.
There is a downside risk of 40 basis points to our growth estimate of 7.2 per cent for fiscal year 2022-23, she said.