Economic activity on the verge of normality, GDP to grow 13.5% in 2022
Economic activity in India is on the verge of normalization after the Covid-19 hit. Due to this, India’s GDP will grow at 13.5% in FY 2022. Japanese brokerage firm Nomura has said this. The Nomura India Business Reception Index (NIBRI) has an index of economic activity of 98.1 for the week ended 14 February. It was 95.9 in the previous week.
Estimated to fall by 6.7% in FY 2021
The Indian economy may decline by 7.7% in the current financial year due to the Corona epidemic. The Reserve Bank of India (RBI) has projected a GDP growth of 10.5% in FY 2022. Nomura has stated that in FY 2021 real GDP may fall by 6.7%, whereas in FY 2022, a growth of 13.5% is expected. The Japanese firm said that there was a jump in mobility indicators in the week ended 14 February.
Power demand declines 0.1% on a weekly basis
Nomura has stated that power demand has fallen by 0.1% on a weekly basis. This may be due to a 9.6% drop in payments during the prior week. In addition, there has been a slight decline in Labor participation. Labor participation this week has been 40.5% as against 40.9% in the previous week.
The proprietary index has been steadily increasing since April
The brokerage firm has said that its proprietary index is on a sustained uptrend after reaching its lowest level due to a strict lockdown in April. This supports our idea of positive growth. Nomura estimates GDP growth to be 1.5% in the fourth quarter of FY 2020, while growth for the first quarter of FY 2021 may be 2.1%.
SBI forecasts 7% decline
GDP growth is expected to be -7% for the financial year ending March 2021, according to SBI Research. This estimate has raised the possibility of positive economic growth rate in the last half year. It had earlier projected a growth of -7.4% in this financial year. Growth was -15.7% in the first half, but if SBI Research estimates it to be correct, it may grow by 2.8% in the second half.
India Ratings forecast 10.4% growth in FY 2021-22
India Ratings & Research has projected GDP growth of 10.4% for the FY 2021-22. The rating agency also says that a solid recovery in GDP growth will not happen until FY23. According to Sunil Kumar Sinha, Principal Economist, India Ratings, in 2022 the economy will make up for what it lost in 2021. Sinha says that the real growth will be modest and will have to wait for 2023 for a solid recovery.
7.7% decline in the economic survey is expected
The Economic Survey presented before the Budget predicts a 7.7% fall in GDP this year due to Corona. However, faster recovery is also expected after this. That is why there will be 11% growth in GDP in 2021-22. Nevertheless, it will take two years for the economy to reach the level before the epidemic. Earlier, there was a negative growth of 5.2% in 1979-80. Negative growth of 7.7% will be highest after independence.
