2nd AE of India's income may peg FY22 GDP growth at 8.6%: Ind-Ra

The major reason for the likely downward revision in GDP growth is the upward revision of FY21 GDP to ₹135.6 trillion in the first revised estimate (1st RE) of national income for FY21, released on January 31.

As a result, the GDP growth of FY21 has now improved to negative 6.6 per cent from the provisional estimate (PE) of negative 7.3 per cent, released on May 31, 2021.

Quarterly GDP growth numbers are also expected to undergo a change. As the FY20 GDP growth have been revised downwards, Ind-Ra now expects GDP growth of all the four quarters of FY20 to be lower than present estimates.

This would mean a likely upward revision of FY21 and downward revision of FY22 quarterly GDP numbers. Ind-Ra’s estimate shows that GDP growth in the first quarter (Q1) FY22 and Q2 FY22 may decline by 90-110 basis points (bp) than estimated earlier and the Q3 FY22 and Q4 FY22 may come in at 5.6 per cent and 5.1 per cent respectively, down from 6 per cent and 5.7 per cent estimated earlier.

ALCHEMPro News Desk (DS)