New Delhi: India’s economy is set to expand a notch faster than previously estimated in the current fiscal year ending March, a recent Bloomberg survey said.
As per the latest survey’s average estimates, the Gross Domestic Product (GDP) is likely to reach 9.4 per cent in this financial year. This is faster than last month’s 9.3 per cent forecast and is mainly due to an increase of 6 per cent and 5.8 per cent in the third and fourth quarter estimates from 5.8 per cent and 5.3 per cent, respectively.
This suggests economic activity is on the rise in Asia’s third-largest economy, India, which has lifted most of the restrictions imposed to prevent a deadly second wave of the COVID-19 pandemic.
According to the survey, although there are no new strict restrictions for testing the Omicron variant, policymakers have maintained a liberal stance to support the recovery.
“Quarter 3 results underscore India’s ability to relatively quickly offset the negative impact of the second wave in Q2,” said Wouter van Eiskelenberg, an economist at Rabobank. “We continue to see an upward trend in mobility among the Indian population, which we expect to translate into higher private consumption going forward. The services sector will probably be the main beneficiary as a result of less government-imposed restrictions. ,
Meanwhile, the record high November wholesale-price is estimated at 14.23 per cent, lower in December to 13.46 per cent. However, the forecasts for longer-term FY22 and FY23 were raised to 12 per cent and 6.5 per cent, compared to 10.4 per cent and 4.75 per cent in the previous month.
“Consistently high core inflation has complicated RBI’s monetary policy formulation at a time of nascent economic recovery,” said Tully McCully, Head of Asia-Pacific Economics at Scotiabank. “While monetary policy is set to remain growth-supportive in the near term, we assess that inflationary pressures and financial stability considerations will prompt the RBI to initiate a cautious monetary normalization phase by mid-2222.”
,