India's Q4 GDP growth is expected to be 2.7 percent, with an annual growth rate of 8.5 percent in FY22: Analysts
On May 31, official economic data is likely to be issued.
According to economists at SBI, the upcoming publication of official data for economic performance is predicted to show a 2.7 percent growth for the January-March quarter, and an 8.5 percent growth for FY22.
They were quick to emphasise, however, that the data are difficult to interpret due to the recent wave of changes, describing the situation as a forecaster's nightmare.
"We...believe that major uncertainties have obscured the GDP projection for Q4 FY22." For example, even a 1% reduction in FY22 Q1 GDP projections from the previous year would be significant.
On May 31, official economic data is likely to be issued.
The Central Statistics Office (CSO) projected Q4 GDP at 41.04 lakh crore and FY22 real GDP growth at 147.7 lakh crore, up 1.7 percent from pre-pandemic levels, they said, adding that the 'SBI Nowcasting model' with unchanged quarterly numbers pegs Q4 GDP growth at 40 lakh crores, down 1 lakh crore from the CSO preliminary projections.
"We expect that negative revisions to Q1, Q2, and Q3 GDP estimates will have a calming effect on Q4 GDP figures. "Every ten thousand crore revision boosts or subtracts 0.07 percent from GDP growth," according to the note.
Early indications for the March quarter results from publicly traded corporations showed improved growth across the board compared to the prior year, but a reduction in operating margin due to higher input costs, it added.Steel, FMCG, chemicals, IT, and auto auxiliary saw higher growth, whereas car, cement, capital goods, and edible oil saw negative profit growth despite higher topline growth, according to the research.
Meanwhile, experts believe that oil prices will not remain high for long, and that the Reserve Bank of India (RBI) would boost rates again at its June policy review.
Economists praised the strong coordination between the RBI and the government, calling it "the best thing to have developed during the crisis."
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