Economists at SBI have cut their forecast for India’s gross domestic product (GDP) growth in financial year 2021-22 to 7.9 per cent from 10.4 per cent earlier due to the second wave of COVID-19 pandemic.
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Economists at SBI have cut their forecast for India’s gross domestic product (GDP) growth in financial year 2021-22 to 7.9 per cent from 10.4 per cent earlier due to the second wave of COVID-19 pandemic.ADVERTISING
“Our analysis shows a disproportionately larger impact on economy this time and given that rural is not as resilient as urban, the pick up in pent-up demand is unlikely to make a large difference in FY22 GDP estimates, and hence it could only be a modest pick up,” the research wing of SBI said in its ‘Ecowrap’ report.
It said GDP outlook in FY22 will be impacted by the trajectory of international commodity prices which have risen sharply during the year. Further, the pass-through impact of higher commodity prices will be visible in domestic prices, thus impacting consumption during the year.
“The overall consumption trajectory will depend on the recovery in services ‘trade, hotels, transport, communication and services related to broadcasting’ which supports roughly 25 crore households. Corporate, in the listed space, reported better growth numbers across parameters in Q4FY21, but this trend may soon reverse,” the report said.
The realised real GDP growth for FY22 would be tad positive, with real GDP at Rs 145.8 lakh crore likely to be slightly higher than FY20 numbers. “Hence, the shape of recovery will be “W-shaped” instead of “V-shaped” as it was anticipated earlier.”
India’s economy grew at a faster-than-expected pace of 1.6 per cent during the fourth quarter of FY21, resulting in a contraction of 7.3 per cent for the entire fiscal, as per official data released on Monday.
Reference : https://www.businesstoday.in/current/economy-politics/sbi-cuts-fy22-gdp-growth-estimate-to-79-sees-w-shaped-recovery/story/440530.html
