SBI economists forecast Q4 GDP growth at 2.7%, FY22 expansion at 8.5% – Times of India

MUMBAI: The upcoming release of official data for economic performance is likely to register a growth of 2.7 per cent for the January-March period, and 8.5 per cent in FY22, economists at SBI said on Thursday.
However, he was quick to add that the numbers are hard to understand because of the revisions we’ve seen so far, and called the situation a prophet’s nightmare.
“We … believe that the GDP estimates for Q4 FY22 are surrounded by significant uncertainties. For example, the 1 per cent decline in the GDP estimates for Q1 FY22 from 20.3 per cent, all other things If left unchanged, the fourth quarter GDP could push growth to 3.8 per cent,” he said.
Official data on the economy is expected to be released on May 31.
The Central Statistics Office (CSO) had projected Q4 GDP at Rs 41.04 lakh crore and FY22 real GDP growth at Rs 147.7 lakh crore, an improvement of 1.7 per cent over pre-pandemic levels, he said, on the ‘SBI Nowcasting Model’. With the quarterly numbers unchanged, Q4GDP growth is pegged at Rs 40 lakh crore, which is Rs 1 lakh crore lower than the initial estimates of the CSO.
“We believe that the downward adjustment in the Q1, Q2 and Q3 numbers could have a pleasant impact on the Q4 GDP numbers. Every Rs 10,000 crore revision adds/detracts 0.07 per cent from GDP growth,” the note said.
It said early trends for March quarter results of listed corporates showed better growth numbers in parameters, with contraction in operating margins on account of higher input costs, as compared to the year-ago period.
Sectors such as steel, FMCG, chemicals, IT and auto ancillary registered better growth, while automobiles, cement, capital goods, edible oil posted negative growth in profits, though the topline registered growth.
Meanwhile, economists said oil prices are unlikely to remain elevated for long, and expect the Reserve Bank of India (RBI) to hike rates again in June’s policy review.
The close coordination between the RBI and the government has been welcomed by economists as the best thing to emerge during the pandemic.