FY22 GDP estimates: Some surprises in the internals

The share of consumption and government expenditure has come down in FY22, which is reflective of the economy not yet being fully back on track

The NSO has been quite consistent in its GDP projections for the year. After revising the FY21 numbers earlier, the growth rate for FY22 stands now at 8.9% instead of 9.2% earlier. It was 8.8% earlier and hence, there has not been a significant revision. There would also be a rather wide price deflator with the GDP in nominal terms increasing by 19.4%, thus yielding a double digit number which is closer to WPI inflation. A question raised is whether CPI inflation is the right index to target for monetary policy.

But this also means that based on the 9 months