India's Q4 GDP growth to be at 1.3%; FY21 GDP decline at 7.3%: SBI

“Based on SBI Nowcasting model the forecasted GDP growth for Q4 would be around 1.3 per cent (with downward bias). We now expect GDP decline for the full year to be around 7.3 per cent (our earlier prediction: 7.4 per cent),” the report said.

Though the impact of the second wave on the real economy was initially thought to be much limited in comparison with the first wave, SBI’s estimates indicate that there might be nominal GDP loss of up to ₹6 lakh crore during Q1 FY22 as compared to loss of ₹11 lakh crore in Q1 FY21. Real GDP loss would be in the range of ₹4-4.5 lakh crore and hence real GDP growth would be in the range of 10 -15 per cent (as against RBI forecast of 26.2 per cent) during Q1 FY21.

Going by SBI’s estimate of 1.3 per cent GDP growth, India is the fifth fastest growing country amongst 25 countries (that have released their GDP numbers so far), the report said.

The bank added in its report that one likely consequence of any upward revision in FY21 estimates is a concomitant decline in FY22 GDP estimates.

SBI has developed ‘Nowcasting Model’ with 41 high frequency indicators associated with industry activity, service activity, and global economy in collaboration with State Bank Institute of Leadership (SBIL), Kolkata. The dynamic factor model is used to estimate the common or representative or latent factor of all the 41 high frequency indicators from Q4 FY13 to Q4 FY21.

Fibre2Fashion News Desk (KD)