GDP likely to grow 8.1% in Q2: SBI report

Mumbai: India's economic growth is likely to be around 8.1 per cent in the second quarter of the current financial year and in the range of 9.3-9.6 per cent during fiscal 2022, according to an SBI research report.

In the first quarter of FY 22, the economy grew 20.1 per cent. For the fiscal 2022, RBI has estimated real GDP growth to be at 9.5 per cent - 7.9 per cent in Q2, 6.8 per cent in Q3 and 6.1 per cent in Q4.

Based on SBI Nowcasting model, the forecast on GDP growth for Q2 FY22 would be around 8.1 per cent (with upward bias). The model uses the dynamic factor model to estimate the common or representative or latent factor of all the 41 high frequency indicators from Q4 of FY13 to Q2 of FY22. Q2 GVA is estimated at 7.1 per cent, says the internal research report by SBI.

Soumya Kanti Ghosh, group chief economic advisor, SBI, says: "We now believe that FY22 GDP growth rate could be in the range of 9.3-9.6 per cent.

The reason for the upward revision is that India recorded only 11 per cent increase in Covid cases during Q3 2021, second lowest among top-15 most affected countries, and the increase in cases has declined to 2.3 per cent in November 2021 over September 2021."

India's projected 8.1 per cent growth rate in Q2 (FY22) is the highest growth across all economies. The average GDP growth of 28 selected economies have decelerated to 4.5 per cent in Q3 (2021) as against 12.1 per cent. Also, at an annual rate of 9.3-9.6 per cent, India's real GDP growth would now be 1.5 per cent -1.7 per cent higher than the pre-pandemic level of FY20. So far, 115.79 vaccine doses have been administered, with 81 per cent of the eligible population receiving at least a single dose and 42 per cent of the eligible population both doses. In certain states including Himachal Pradesh, Gujarat, Uttarakhand, Kerala, Karnataka, Telangana and Madhya Pradesh more than 50 per cent of the eligible population has been fully vaccinated, he said.