The gross domestic product (GDP) is expected to grow double to 8 per cent in Q2FY23, from 3.8 per cent in Q1FY23, according to the ICRA estimates.

"We project the GDP expansion at 6.5-7.0 per cent for Q2 FY2023, a base-effect led moderation from 13.5 per cent in Q1 FY2023. Crucially, GDP growth is expected to rise to ~8.0 per cent in Q2 FY2023 from 3.8 per cent in Q1 FY2023, when compared to the pre-Covid levels of 2019, which is a more tangible signal of the ongoing, yet uneven recovery," said Aditi Nayar, Chief Economist, ICRA.

The momentum of economic activity widened in August 2022 amid some moderation in rainfall, easing of supply-side issues like semiconductor availability for the auto sector, and pre-festive accumulation of inventories, even as the slowdown in external demand continued to act as a dampener.

In YoY terms, the performance of nine of the 16 high frequency indicators, including the generation of GST e-way bills, production of motorcycle and passenger vehicles (PV), vehicle registrations, consumption of finished steel, petrol and diesel, improved in August 2022 relative to July 2022.

Meanwhile, in the current month, the early data is mixed. The all-India electricity demand witnessed a healthy surge in September 1-13, 2022 owing to the moderation in rainfall in the early part of the month. However, the average daily vehicle registrations have recorded a sharp MoM decline of ~7 per cent in September 2022, so far.

ICRA expects registrations to pick-up during the Navratri season, the onset of 15-day Shradh period is likely to constrain overall retail volumes in the month.

ICRA is cautiously optimistic that the pre-festive stocking implied by the record-high generation of GST e-way bills in August 2022 is an indication of a revival in confidence and imminent improvement in demand for goods.