April 18, 2021

India-Raw fiscal year 21 revises GDP

Apart from the positive growth indicators, India-Raw also boasted of the country’s advanced corona virus status behind the rapid economic recovery. However, the company continues to question whether it can sustain the pace of recovery after the festive season.

The GDP estimates that GDP will shrink by 0.8 percent in the third quarter, while GDP is forecast to enter a positive range. (Photo: Reuters / Representative Image)

Domestic rating agency India has revised its annual GDP forecast for fiscal 21 to better than expected after the deep economic shock triggered by the Govt-19 epidemic. It expects India’s GDP to shrink by 7.8 per cent year-on-year, much lower than the previous estimate of 11.8 per cent.

Apart from the positive growth indicators, India-Raw also boasted of the country’s advanced corona virus status behind the rapid economic recovery. However, the company continues to question whether it can sustain the pace of recovery after the festive season.

It may be noted that the Indian economy has achieved a massive recovery in the second quarter of 2020-21 after shrinking by 23.9 per cent in the first quarter.

India estimates that headaches arising from the epidemic are unlikely to go away before mass vaccinations, but the world is now rapidly adjusting to the post-epidemic world.

The GDP estimates that GDP will shrink by 0.8 percent in the third quarter of the year, while GDP is expected to enter a positive zone in the final quarter of 2020-21.

Devendra Bandh, chief economist at India Estimates, said the country’s GDP will grow by 9.6 per cent in 2021-22, primarily due to the weak base of 2020-21.

As India’s growth trajectory rises, some sectors such as trade, hotels, real estate and tourism are facing significant headaches. These businesses are likely to be affected by current Govt-19 protocols such as social distance.

The company expects government spending to be 3.3 percent after significant spending cuts. It said exports could fall by almost 8 per cent due to the current trade conflicts and increasing epidemic uncertainty.

Also read | The Reserve Bank says India’s economy is recovering fast, warns of ‘apple worm’