What were the highlights of the GDP announcement by the government for Sep-22 quarter?

Here are some of the major highlights of the GDP announcement for the Sep-21 quarter made by the MOSPI.

· The real GDP growth for the Sep-21 quarter came in at 8.4% while the gross value added or GVA stood at 8.5%. GVA excludes impact of indirect taxes and subsidies on GDP.

· This GDP growth of 8% is precisely in line with the Reuters poll of economists and it is a good 50 bps higher that what the RBI has projected.

· Sequentially, the GDP growth is lower than Jun-21 first quarter, when GDP had grown by over 20%, but that was largely due to an inordinate low base effect.

· The nominal GDP (before factoring in inflation) was up 17.5%. If you compare with Q2 2019, then nominal GDP is up 12.3% while real GDP is up 12.3% due to inflation effect.

· Agricultural growth was robust at 4.5%, all-important manufacturing improved to 5.5% and mining and quarrying led the way with 15.1% yoy growth.

· There was also good traction from the services sector with segments like construction, public utilities, financial services and real estate services showing good growth.

· Let us take an expenditure approach. Like in the first quarter, exports and imports have made a big leap in contribution to GDP.

· Between Sep-20 quarter and Sep-21 quarter, the share of total trade (exports + imports) in GDP has gone up from 38% to 45%, showing that PLI and export thrust are working.

· High frequency indicators are also favourable. Key parameters like coal production, cement production, CV sales, cargo handled, air passengers, trade are all sharply up.

· The moral of the story is that, while manufacturing still faces an element of supply chain constraints, it is the services sector that has filled the gap in a big way.