scorecardresearch
Ind-Ra estimates GDP to grow 8.3% in Q2 FY22

Ind-Ra estimates GDP to grow 8.3% in Q2 FY22

Ind-Ra stated that the first quarter was impacted severely by the second COVID-19 wave, leading to reduced workplace mobility and economic activities.

It further estimated FY22 GDP growth to be at 9.4% It further estimated FY22 GDP growth to be at 9.4%

Rating agency India Ratings and Research (Ind-Ra) expects GDP growth to touch 8.3 per cent in Q2 FY22. It further estimated FY22 GDP growth to be at 9.4 per cent.

Ind-Ra stated that the first quarter was impacted severely by the second COVID-19 wave, leading to reduced workplace mobility and economic activities. Workplace mobility was 26 per cent lower than the baseline in Q1 and 16 per cent lower year-on-year than the baseline at FYE21. Mobility started improving in Q2 FY22 and was only 7 per cent lower year-on-year than the baseline at end Q2 FY22.

“The improvement in workplace mobility became possible due to the extensive vaccination programme of the government. Cumulative vaccinations leapfrogged to 890.21 million at end-2QFY22 from 335.72 million at end-1QFY22 (FYE21: 65.12 million),” stated Ind-Ra.

Nine consecutive quarters of over 3 per cent agriculture gross value-added growth has brightened consumer spending, stated the report. It expects private final consumption expenditure to grow nearly 10 per cent in Q2 FY22.

“Even investment activities have found support from the government’s focus on infrastructure. Ind-Ra expects the fixed capital formation to grow at around 8.5 per cent in 2QFY22. The union government’s capex grew 51.9 per cent in 2QFY22 (1QFY22: 26.3 per cent) and aggregate capex of 24 state governments grew 62.2 per cent in 2QFY22 (1QFY22: 98.4 per cent). However, private capex revival is still slow and limited to select sectors,” it said.

Ind-Ra stated that these growth numbers should be interpreted with caution since H1 FY22 growth was due to the lower base of H1 FY21. “Recent reforms measures such as production-linked Incentive scheme in combination with sustained exports growth may provide a fillip to the ongoing growth recovery,” it added.

Also read: India's GDP expected to grow at 8.5% in 2022: NASSCOM
Also read: GDP growth estimated to be 8.1% in Q2 FY22: SBI Ecowrap

Published on: Nov 29, 2021, 4:01 PM IST
Posted by: anwesha madhukalya, Nov 29, 2021, 3:57 PM IST