Rohit Vaid New Delhi, Nov 29, : .India’s Q2FY22 GDP Growth Rate is expected to rise to over 7 percent due to a healthy monsoon season and pent-up demand, experts stated.
Industry watchers believe that the trend will be supported by an increase in service activities, further improvement in mobility, and increased government spending.
Economy watchers believe that the accelerated vaccination drive and the easing of Covid restrictions have brightened consumers’ sentiments.
The expected increase in agricultural output due to a healthy rainy period during the July-September period should boost GDP growth to between 7 and 9 percent.
However, the downside to growth would be the waning base effect and high fuel and commodity prices.
The official GDP figure for Q2FY22 will be released on November 30,
Aditi Nayar (ICRA Chief Economist) stated that Q2FY22 GDP was almost back to pre-Covid, which is a significant improvement over the quarter before it was hit by the second Covid wave.
Nayar said that “in YoY terms however, most sectors would report a base-effect-led moderation of growth.”
The agency recently raised its GDP growth forecasts for Q2FY22 from 7.9 percent to 7.9 percent.
“Q2FY22 GDP growth is expected at 9 percent YoY versus 20.1 percent in Q1,” stated Madhavi Arora (Lead Economist Emkay Global Financial Services).
She said that services are likely to lead the sequential uptick of growth, along with further improvements in mobility and increased government spending.
A near total national lockdown in 2011 had resulted in a 7.5% YoY contraction of Q2FY21 GDP.
“We expect India’s GDP to grow by 8.5% YoY and 7.5% YoY in Q2FY22, thanks to some support from a favourable statistic base and a gradual lifting of lockdown restrictions by many states towards the end, said Suman Chowdhury Chief Analytic Officer, Acuite Ratings & Research.
Chowdhury said that the steady progress in vaccination has been supported by improved consumer sentiments, relative resilience in the industrial sector, and a gradual rebound of the services sector with better mobility, buoyancy and increased government capital expenditure.
India Ratings and Research (IndRa) projects GDP growth of 8.3 percent in 2QFY22 and 9.4 percent in FY22.
“Consecutive nine quarters with over 3 percent agriculture gross value-added has brightened consumer spending.
Ind-Ra predicts that private final consumption expenditures will grow by close to 10% in the 2QFY22.It stated that even investment activities have been supported by the government’s emphasis on infrastructure.”
Ind-Ra anticipates that fixed capital formation will grow at around 8.5% in 2QFY22.
“Capex for the Union government grew 51.9 percent in 2QFY22, while aggregate capex for 24 state governments grew 62.2 percent in 2QFY22.It said that private capex revival was still slow and limited to a few sectors.
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