Ahead of January-March FY22 GDP print next week, projections by
economists range widely, from 2.7 per cent to 5.5 per cent GDP
growth. Most, however, agree that the economy was on a steady
footing, with the impact of the omicron wave rather contained as
retail fuel prices were raised only after the recent round of state
elections, Trend reports citing Business Standard.
They also admit that predicting FY22 number is difficult because
there are likely to be revisions to GDP numbers of FY21 and first
three quarters of FY22.
India's GDP could grow by around 2.7 per cent for January-March
quarter, as per State Bank of India's Chief Economic Advisor Soumya
Kanti Ghosh. Ghosh expects FY22 GDP growth to be around 8.5 per
cent, but warns that Q4 numbers could shift considerably based on
revisions of previous quarters.
“Q4FY22 GDP numbers are due for release on 31 May and it is
difficult to comprehend the numbers as a spate of customary
quarterly revisions in FY22 could make it a forecaster's nightmare.
We are projecting GDP growth for FY22 at 8.5 per cent and Q4FY22 at
2.7 per cent,” Ghosh said in his latest analyst report on
Ghosh said that Q4 projection is clouded by significant
uncertainties as even an 1 per cent downward revision in Q1FY22 GDP
estimates, all other things remaining unchanged, could push Q4 GDP
growth to 3.8 per cent.
“We believe that downward adjustments in Q1, Q2, Q3 numbers could
have a soothing impact on Q4 GDP numbers. Every Rs 10,000 crore
revision adds / subtracts 7 basis points from GDP growth,” Ghosh
Ghosh said that early trends of Q4FY22 results from corporates
in the listed space, reported better growth numbers across
parameters as compared to the same period in FY21 albeit
contraction in operating margins took place due to higher input
cost owing to inflationary pressures.
Rahul Bajoria, India Economist with Barclays, also expects
revisions to previous quarters' GDP print.“The January-March
quarter is going to be a high watermark as far as profitability is
concerned. From April-June onwards, you are going to see margin
compression make a bigger play due to inflation,” he said.
Bajoria sees Q4 GDP growth at 3.7 per cent and FY22 at 8.8 per
Bank of Baroda Chief Economist Madan Sabnavis, however, was
optimistic and said there was a pent-up demand in the service
sector, which did well in spite of Omicron fears. Sabnavis has
projected Q4 growth at 5.5 per cent and FY22 at 9.2 per cent.
“We are looking at no change in GDP of previous three quarters. We
have seen a rapid improvement in the services sector. The omicron
wave did not affect services as much and we saw a major boom,
especially in March,” Sabnavis said.
Aditi Nayar, Chief Economist with ICRA ltd, projects that Q4 GDP
will be 3.5 per cent and GVA will be 2.7 per cent
“This is 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,” she said, disagreeing with assessments by other
economists quoted above.
Nayar said she was apprehensive that both agriculture and
industry will post a sub-1 per cent GVA growth in Q4, whereas
services growth will print at around 5.4 per cent
“Fuel prices increase due to the war did not get passed on till
very late in Q4 as prices were increased only after the elections.
The latter part of March would have been impacted to some extent.
Service sector growth would be more pronounced from April onwards.
There could be some weakness in agriculture and manufacturing may
also be nothing to write home about in Q4, said DK Joshi, Chief
Economist with Crisil.
Joshi projects FY22 GDP growth at 8.5-8.9 per cent and Q4 at 4.5
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