New Delhi: India’s real GDP (constant prices) grew at 7.8 per cent in Q1 2023-24 reaching ₹ 40.4 lakh crore as against real GDP of ₹37.4 lakh crore during the corresponding period of the previous year, according to the Public Debt Management report of the Union Finance Ministry for the quarter of April-June 2023, released today.
The real GDP growth at constant prices during Q1 2022-23 was 13.1 per cent. Agriculture, forestry and fishing GVA grew 3.5 per cent between April and June, with manufacturing GVA growing for the second quarter in a row, after half a year of contraction, with the pace of growth picking up slightly to 4.7 per cent in Q1 2023-24.
However, the sharpest surge was registered in services sectors which pulled the estimates for the first quarter of 2023-24. GDP at current prices in Q1 2023-24 is estimated at ₹ 70.7 lakh crore, as against ₹ 65.4 lakh crore in Q1 2022-23, showing a growth of 8.0 per cent as compared to 27.7 per cent in Q1 2022-23.
India’s foreign exchange reserves stood at USD 595.1 billion as of the end of June 2023, increasing from USD 589.2 billion in June 2022. Between April 3, 2023 and June 30, 2023, the Indian Rupee (INR) appreciated by 0.42 per cent. The value of INR against USD as of April 3, 2023, stood at 82.39 as against 82.04 as of June 30, 2023.
Retail inflation mirrored in terms of Headline Consumer Price Index (CPI) declined during Q1 2023-24 with Headline CPI reaching at 4.8 per cent (year-on-year basis) in June 2023 relative to 5.7 per cent in March 2023. Waning of supply shocks and monetary policy changes pulled inflation below 5 per cent in Q1 2023-24. Commodity composition reflects that the easing of inflation was reflected primarily in prices for fuel & lighting, clothing & footwear, housing and food and beverages during the first quarter of 2023- 24. The Consumer Food Price Index (CFPI) moderated to 4.5 per cent in June 2023 compared to 4.8 per cent in March 2023. However, the decline in inflation which was below 5 per cent during Q1 2023-24 reversed its trend in July 2023 with CPI shooting to 7.4 per cent. However, headline inflation decreased to 6.8 per cent in August 2023. Wholesale Price Index (WPI) remained in contraction mode in the first quarter of 2023- 24 with inflation declining to as low as (-) 4.2 per cent in June 2023. The decline in the rate of inflation in June 2023 was primarily due to a fall in prices of mineral oils, food products, basic metals, crude petroleum & natural gas and textiles. However, a surge in the prices of primary articles by 7.6 per cent slowed the contraction of WPI to ( -) 1.4 per cent in July 2023 with the food index witnessing a growth of 7.7 per cent. Further, the WPI headline inflation rate was recorded at (-) 0.52 per cent in August 2023.
The United Nations Conference on Trade and Development (UNCTAD) in its latest report revised its nowcast of merchandise trade volume downwards by 0.09 per cent for Q3:2023; with world trade growth nowcasted at 0.35 per cent. However, on a quarterly basis world trade growth is higher from Q2:2023 estimates at 0.06 per cent. India’s merchandise exports continued to decline in Q1:2023-24 to USD 104.0 billion mirroring a weakening in global demand. Merchandise exports stood at USD 114.7 billion and USD 104.5 billion in Q4: 2022-23 and Q3:2022-23 respectively. On a sequential basis, India’s petroleum exports registered a sharp plunge in the current quarter and stood at USD 19.1 billion in Q1: 2023-24 compared to USD 23.8 billion in Q4: 2022- 23 primarily on the back of a decline in crude prices along with some moderation in demand.
Softening of global commodity prices also led to moderation in India’s import payment which contracted to USD 160.3 billion in Q1:2023-24 compared to USD 165.4 billion in Q4: 2022-23. These developments led to the widening of the trade deficit to USD 56.3 billion in Q1:2023-24 relative to USD 50.7 billion in Q4:2022-23.
The net foreign direct investment (FDI) declined to USD 4999 million during Q1: 2023-24 compared to USD 13392 million during the corresponding period a year ago. On the financing side, foreign portfolio investment (FPI) flows have remained buoyant during Q1:2023-24 with net FPI inflow at USD 14621 million compared to outflow of 14630 million in the corresponding period last year.
