Q2 growth at 6.5-9.9%: economists
STORIES, ANALYSES, EXPERT VIEWS
The economy likely grew 8.3% in the second quarter of the current fiscal year, the median of estimates in an ET poll of economists. The estimate of GDP growth for the July-September quarter ranged from 6.5% to 9.9%.
The growth was aided by a strong base effect from the year ago, when the economy contracted 7.4%, the Covid vaccine ramp-up, faster government spending and improved consumption, economists said.
The recovery, they cautioned, is fragile and high global commodity prices, especially oil and domestic coal shortages, could act as a drag. Also, the recovery was not uniform but K-shaped, they said--some sectors grew fast while others contracted.
India’s GDP expanded 20.1% in the first quarter, magnified by the base effect of nearly 25% contraction a year ago. In all nine economists were polled.
"We are tracking GDP for the July-September quarter at 9.9% on the back of a strong rebound in consumption activity post the Delta wave, with strong export performance and manufacturing activity contributing to the growth revival," said Rahul Bajoria, chief India economist, Barclays.
The Reserve Bank of India (RBI) Economic Activity Index suggested that real GDP grew 9.6% in the July-September period. The economy gradually opened in the quarter as the severe second wave of the pandemic abated. High-frequency indicators such as industrial production, vehicle sales, exports, port cargo traffic, rail freight traffic, and goods and service tax (GST) e-way bills all pointed toward growth in the second quarter, economists said.
"The economic recovery widened in the second quarter as the crisis wrought by the second wave of Covid-19 abated, with a larger number of sectors bettering their pre-Covid performance, relative to the position in Q1," said ICRA chief economist Aditi Nayar, adding that the revival was a multi-speed one, with a considerable variation in the pace of growth across sectors.
ICRA expects the economy to have grown 7.7% in the last quarter. "Moreover, there is growing evidence of a K-shaped recovery," she said.
(ET)
