The GDP growth for the fourth quarter is scheduled to be released today. Analysts had varying predictions for the January to March quarter. Soaring prices and dampened consumer sentiments are likely to lead to a subdued growth. Economists believe that the Reserve Bank of India has an uphill task of taming inflation through rate hikes but without hurting the economic growth.
To begin with, SBI Ecowrap stated that the fourth quarter growth is likely to be 2.7 per cent. “We are projecting GDP growth for FY22 at 8.5 per cent and Q4 FY22 at 2.7 per cent. We however believe the GDP projection for Q4 FY22 is clouded by significant uncertainties. For example, even a 1 per cent downward revision in Q1 GDP estimates of FY22 from 20.3 per cent, all other things remaining unchanged could push Q4 GDP growth to 3.8 per cent,” it stated.
A Reuters poll showed that the economy probably grew 4 per cent in January-March quarter from a year earlier. This could be the slowest pace of growth, following the growth of 5.4 per cent in the previous quarter.
The agency stated that forecasts for the data ranged from 2.8 per cent to 5.5 per cent in a survey comprising 46 economists.
Rating agency ICRA predicted the fourth quarter GDP growth to be 3.5 per cent. The agency said the hiccups in the recovery of the contact-intensive services attributable to the third wave of Covid-19 in the country may have also affected the economic growth in the quarter.
ICRA's Chief Economist Aditi Nayar said Q4 was a challenging quarter, with the Omicron-fuelled third wave of Covid-19 arresting the momentum in contact-intensive services, and a pervasive pressure on margins from higher commodity prices.
As for FY22, SBI predicts the GDP growth to be at 8.5 per cent. A Reuters survey last month estimated average growth for 2021-22 at 8.7 per cent.
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