According to CEIC’s GDP Nowcast, India’s GDP is going to increase by 5.8% y/y in Q3 (FY2023Q2). Since its last update a week ago, we downgraded our projection by 0.14% points on account of the negative impact of air cargo traffic, a leading indicator for India’s foreign trade. The recently released data on air transportation showed a decrease of 1.2% y/y in air cargo traffic for August, the first negative growth rate since February, which had a negative impact of 0.3% points on the GDP growth projection for Q3.

The negative impact of air cargo traffic outweighed the positive impact of the air passenger traffic data. The latter climbed upwards after two months of decrease, even as the growth rate slowed to 73.1% y/y in August 2022, thanks to dissipating low base, which had a positive contribution to the Q3 growth projection of 0.1% points.

The air transportation data had also a negative net impact on the Q4 GDP growth estimate. The August air transportation data resulted in a downward revision of the projected Q4 (FY2023Q3) growth from 6.5% y/y to 6.1% y/y.

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