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'GDP expected to grow by 20% YoY in Q1FY22'
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SME Times News Bureau | 18 Aug, 2021
India's GDP is expected to grow by 20 per cent on a year-on-year basis in Q1FY22, ratings agency ICRA said on Wednesday.
It also expects the gross value added (GVA) at basic prices at constant 2011-12 prices at 17 per cent in Q1FY22.
The
ratings agency said that the trend has been supported by healthy
Central and state government capital spending, robust merchandise
exports and resilient demand from the farm sector.
It also said
that muted base of last year's nationwide lockdown has aided in
concealing the impact of the second wave of Covid-19.
"Based on
our assessment of volumes and available earnings, we have forecast the
GVA expansion in industry at a considerable 37.5 per cent in Q1 FY2022,
led by construction and manufacturing, which experienced significantly
less curbs in the just-concluded quarter compared to the situation
during last year's stringent nationwide lockdown," ICRA's Chief
Economist Aditi Nayar said.
"In particular, construction activity
benefitted from the healthy Central and the state government capex
spending in Q1 FY2022, which exceeded even the pre-Covid levels of Q1
FY2020."
The GoI's capital expenditure and net lending stood at
Rs 1.1 trillion in Q1FY22, a YoY growth of 27.6 per cent, and a sharp
78.4 per cent higher than Q1 FY2020, when the model code of conduct was
in place during the parliamentary elections.
"With a contraction
in the GoI's non-interest, non-subsidy revenue expenditure and continued
impairment in demand for contact-intensive services, we expect the GVA
in the services sector to post a relatively lower, albeit double-digit
expansion of 12.7 per cent in Q1 FY2022."
"The GVA growth in
agriculture, forestry and fishing is likely to print at 3 per cent,
benefitting from the healthy rabi harvest. Despite the higher incidence
of Covid-19 cases in rural India in the second wave, healthy crop output
and procurement, as well as higher minimum support prices appear to
have buffered the farm sector's demand during this challenging period."
According to Nayar, the overall GVA growth in Q1FY22 to be as high as 17 per cent.
"Given
the sharp rise in the indirect taxes, we anticipate that the National
Statistics Office (NSO) may peg the GDP expansion at a relatively higher
20 per cent for Q1FY22."
"In our view, the GVA growth provides a better gauge of the economic performance than the GDP in the current year."
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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