India's economic activity lost pace since Q3 in FY22: SBI Research

The Q4 FY22 gross domestic product (GDP) numbers are expected to be much lower than Q3 indicating a continuous deceleration in growth since the fiscal began.

Beneficial effects of the rapid ebb of infections have, however, been overwhelmed by the geopolitical conflagration since February 2022, the SBI report said.

Consumer price inflation (CPI) edged above the upper tolerance band as unfavourable base effects combine with the onset of supply shocks as conflict escalates.

SBI projected GDP growth for FY22 at 8.5 per cent and for Q4 FY22 at 2.7 per cent.

The global growth outlook appears grim as geopolitical tensions linger, commodity prices remain elevated and withdrawal of monetary accommodation gathers speed. Emerging economies face risks of capital outflows and higher commodity prices feeding into inflation numbers.

Globally, while the average real GDP year-on-year (YoY) growth in Q1 2022 for 25 economies at 5.5 per cent is a tad higher that the preceding quarter, GDP growth is marking an abrupt reversal in major economies like the United States, France, Italy and Sweden.

Global financial volatility continues amidst the prolonged Russia-Ukraine crisis, the report noted. However, after touching the level of 3 per cent, that is double its level at the start of the year and the highest since December 2018, US 10-year yield has declined in the recent weeks mainly on account of rising fears of recession.

ALCHEMPro News Desk (DS)