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India’s Q4 GDP Growth Likely To Be Lower Than Q3; Analysts Peg It Up To 4.5%


Even as gross domestic product (GDP) data for January-March 2022 quarter is due for release on May 31, analysts have a wide range of growth forecasts from 2.7 per cent to 4.5 per cent for the quarter. SBI expects growth at 2.7 per cent for the fourth quarter of 2021-22, rating agency Icra sees 3.5 per cent growth, and CRISIL forecasts it at 4.5 per cent. Here’s what various analysts expect regarding the GDP forecast:

ICRA Forecast For Q4

ICRA expects the year-on-year (YoY) growth in GDP to have moderated to 3.5 per cent in Q4 FY2022 from 5.4 per cent in Q3 FY2022 on account of the impact of higher commodity prices on margins, decline in wheat yields and the hiccups in the recovery of the contact-intensive services attributable to the third wave of COVID-19 in India, as well as the high base.

“We expect both agriculture and industry to post a sub-1 per cent GVA (gross value added) growth in Q4 FY2022, whereas services growth is expected to print at around 5.4 per cent in that quarter. Encouragingly, relative to the corresponding pre-COVID-19 quarter of FY2019, growth in GDP is expected to remain healthy in Q4 FY2022 at 8.6 per cent, as against 9.4 per cent in Q3 FY2022. We forecast the YoY expansion in real GDP at 8.5 per cent in FY2022 (as against the NSO’s projection of 8.9%), exceeding the FY2020 levels by a muted 1.3 per cent,” it said in its latest report.

SBI Forecast For Q4

SBI Research expects India’s GDP to grow 2.7 per cent in the March 2022 quarter saying that the GDP projection for Q4 FY22 is clouded by significant uncertainties. “We are projecting GDP growth for FY22 at 8.5 per cent and Q4 FY22 at 2.7 per cent. We, however, believe that 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 said.

SBI Ecowrap said the economic activity, which gained strength in Q2 FY22 with the ebbing of the second wave, has lost pace since Q3, exacerbated by the spread of the Omicron variant in Q4. The beneficial effects of the rapid ebb of infections have, however, been overwhelmed by the geopolitical conflagration since February 2022. CPI inflation edged above the upper tolerance band as unfavourable base effects combine with the onset of supply shocks as conflict escalates.

CRISIL Forecast For Q4

Rating agency CRISIL’s Chief Economist D K Joshi said it expects the GDP to grow at 4.5 per cent in the fourth quarter of the last financial year.

Reuters’ Poll For Q4 GDP Growth

Growth in Asia’s third-largest economy was pencilled in at 4 per cent for the January-March quarter from the same period a year ago in a May 23-26 Reuters poll of 46 economists, down from 5.4 per cent in Q4 2021.

India’s GDP grew 5.4 per cent in the December 2021 quarter, which was lower than 8.4 per cent growth in the previous quarter. However, it was much higher than 0.5 per cent growth that was seen in the corresponding period of the previous fiscal 2020-21. The GDP grew 1.6 per cent in the fourth quarter of FY21.

In its April monetary policy review, the Reserve Bank of India (RBI) had revised downwards its GDP growth projection for the current financial year to 7.2 per cent, compared with the 7.8 per cent forecast earlier. Its Governor Shaktikanta Das said “escalating geopolitical tensions have cast a shadow on our economic outlook”.

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