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India's GDP growth likely to top 9.5% in FY22: SBI report

India's GDP growth likely to top 9.5% in FY22: SBI report

The SBI research report further stated that it believes the real GDP growth would now be higher than the RBI's estimate of 9.5 per cent, assuming the RBI growth numbers for Q3 and Q4 to be sacrosanct.

The economy registered an 8.4 per cent growth in the second quarter of the current fiscal (FY22), as per the data released by the National Statistical Office (NSO) on Tuesday. The economy registered an 8.4 per cent growth in the second quarter of the current fiscal (FY22), as per the data released by the National Statistical Office (NSO) on Tuesday.

India's gross domestic product (GDP) is expected to grow more than 9.5 per cent in FY21-22, according to SBI research report-Ecowrap.  
 
The economy registered an 8.4 per cent growth in the second quarter of the current fiscal (FY22), as per the data released by the National Statistical Office (NSO) on Tuesday, November 30.  
 
The April-June growth of FY22 stood at 20.1 per cent. The Reserve Bank of India (RBI) had in its October monetary policy review retained its forecast for real GDP growth at 9.5 per cent in 2021-22, comprising 7.9 per cent growth in Q2, 6.8 per cent in Q3, and 6.1 per cent in Q4 of FY22.

Also Read: Economists peg India's Q2 GDP figures close to 8%

"We believe that the real GDP growth would now be higher than the RBI's estimate of 9.5%, assuming the RBI growth numbers for Q3 and Q4 to be sacrosanct," the SBI research report further stated.

 The real GDP growth may be near to 10 per cent, it added. 
 
The report said that GDP grew by 8.4 per cent in Q2 FY22 on the back of double-digit growth in mining and quarrying, public administration, defence and other services. The real GVA increased by 8.5 per cent, a tad higher than the GDP growth. 
 
In H1 FY21, the country exhibited a real GDP loss of Rs 11.4 lakh crore (on a year-on-year basis) due to complete lockdown in April-May and partial lockdown in June-September, it added. 
 
The situation has improved in FY22, and in H1 FY22 the real gain was around Rs 8.2 lakh crore.

Also Read: India GDP grows by 8.4% in Q2 on low base, high vaccination coverage 
 
"This indicates that real loss of Rs 3.2 lakh crore still needs to be recouped to reach the pre-pandemic level," the report said. 
 
The sector-wise data indicates that trade, hotels, transport, communication and services related to broadcasting are still the most affected, and the real loss of Rs 2.6 lakh crore is still needed to be recouped in these sectors, it noted. 
 
Overall, the economy is still operating at 95.6 per cent of the pre-pandemic level (with trade, hotels, transport, communication & services related to broadcasting still at 80 per cent) and should take one more quarter to recoup the losses. 
 
In Q2 FY22, the FMCG sector reported top-line year-on-year growth of 11 per cent, while EBIDTA (earnings before interest, taxes, depreciation, and amortisation) and PAT grew by 4 per cent each. 
 
However, rural markets, which showed good resilience thus far during the pandemic, have slowed in the last couple of months as suggested by some of the industry majors, according to the report. 
 
The research report said the new investment announcements in the current year looks encouraging, with around Rs 8.6 lakh crore investment announcements made so far in the last seven months of FY22. 
 
With the private sector contributing around 67 per cent of this i.e. Rs 5.80 lakh crore, it seems private investment revival is on the horizon, it added.