Motilal Oswal expects India’ real gross value added (GVA) growth to be 7-8 per cent year on year (YoY) in the second quarter (Q2) of this fiscal (FY22) compared to 20.1 per cent YoY growth in the first. Its in-house economic activity index (EAI) for real GVA (called EAI-GVA) posted a growth of 7.7 per cent YoY in July, the lowest in five months, against 10.7 per cent YoY growth in June and a contraction of 5.2 per cent YoY in July 2020.
Its in-house estimates suggest some moderation in EAI-GVA growth in July this year, largely on account of weaker fiscal spending. On the other hand, private spending (consumption and investments) has grown decently.Motilal Oswal expects India's real gross value added (GVA) growth to be 7-8 per cent year on year (YoY) in the second quarter of this fiscal compared to 20.1 per cent YoY growth in the first. Its in-house economic activity index for real GVA (EAI-GVA) saw a growth of 7.7 per cent YoY in July—the lowest in five months—against 10.7 per cent YoY growth in June.#
On the contrary, EAI-GDP exhibited better growth of 5.6 per cent YoY in July 2021 against a 2.7 per cent YoY growth in Jun, but much weaker compared to the March-May period this year.
While investments grew at the lowest level in five months in July this year, private consumption grew at a three-month-high pace during the month. Within investments, government capital expenditure declined for the second time in the first four months of the last fiscal, while the private sector grew decently on the low base of July 2020.
Most indicators that the company analyses on a monthly basis to track the progress in economic growth paint a mixed picture of August 2021. While e-way registrations, toll collections, mobility indices, and power generation have increased at a faster rate, auto registrations, merchandise exports and the manufacturing PMI have weakened in that month.
The fear of a potential third wave seems to be restricting economic activity at this stage, it said.
ALCHEMPro News Desk (DS)
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