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CRISIL Revises India’s GDP Forecast for FY23 Down From 7.3% to 7%

CRISIL has revised its forecast for India’s real gross domestic product (GDP) growth to 7 per cent for the current fiscal (2022-23) from 7.3 per cent estimated previously. The credit rating agency said this is primarily because the slowdown in global growth has started to impact India’s exports and industrial activity.

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More About The Forecasts:

Crisil downgraded the India growth forecast by 30 bps to 7 per cent while ICRA pegged the economic expansion at 6.5 per cent for the second quarter of FY2022-23. This is mainly due to the ripple effect of slowdown in global growth and mixed crop output.

What Has Been Said:

“We have revised down our forecast for real gross domestic product growth to 7 per cent for fiscal 2023 from 7.3 per cent, primarily because of the slowdown in global growth that has started to impact our exports and industrial activity. This will test the resilience of domestic demand,” Crisil chief economist Dharmakirti Joshi said.

Aditi Nayar, his counterpart at Icra, in her report pencilled a 6.5 per cent growth in Q2 of the current fiscal, nearly half of the year-ago quarter when the economy had clipped at 12.7 per cent, but which is still a tad higher than the monetary policy committee’s September forecast of 6.3 per cent and at 6.5 per cent in gross value added (GVA) less than half of 13.5 per cent a year ago.

Main Causes For This Downturn:

The lower numbers to the mixed crop output trends revealed by the advance estimates of kharif production, adverse input cost movements for certain sectors with a higher fuel intensity, as well as the impact of the flagging external demand on non-oil merchandise exports, which whittled down the gains from robust demand for contact-intensive services, healthy capital spending by government and pre-festive season stocking of goods.

Paring growth forecast only by 30 bps as domestic demand still remains supportive, helped by a catch-up in contact-based services, government capex, relatively accommodative financial conditions, and overall normal monsoons for the fourth time in a row. The ripple effect of the global slowdown will be felt more next fiscal, which will put domestic demand under pressure as interest rate hikes get transmitted more to consumers, and the catch-up in contact-based services fades.

About The GDP Components:

GDP growth over the pre-Covid levels is expected to double to around 8 per cent in Q2 relative to 3.8 per cent seen in the previous quarter. The agency estimates the sectoral growth in Q2 to be driven by the services sector (9.4 per cent), with a subdued trend foreseen for the industry (2 per cent), and agriculture, forestry and fishing (2.5 per cent).

Despite the markdown in near-term growth, the country is expected to remain a growth outperformer over the medium-run, and expected GDP growth to average 6.6 per cent between fiscals 2024 and 2026, compared to the 3.1 per cent global growth forecast by the International Monetary Fund.

About Other Emerging Economies:

China (4.5 per cent growth estimated for 2023-25), Indonesia (5.2 per cent), Turkey (3 per cent) and Brazil (1.6 per cent).


Credit Rating Information Services of India Limited (CRISIL) is an Indian analytical company providing rating, advisory, risk & policy, and research, and it is a subsidiary of the American company S&P Global. It was the first credit rating agency in India introduced in the year of 1987 with the name of Credit Rating Information Services of India Limited.

Established: 1987

Headquarters: Mumbai, Maharashtra

MD & CEO: Amish Mehta

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