Indian GDP to grow by 7.8% in Q2, 9.4% in FY22: HDFC Bank

27 Nov '21

2 min read

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India’s real gross domestic product (GDP) will grow by 9.4 per cent in fiscal 2021-22 (FY22) and decelerate to 7.5 per cent for the next fiscal as the base effects result in the higher growth in the this fiscal wear off, according to a recent report by HDFC Bank. Official data print on the GDP will show a 7.8 per cent expansion on a year-on-year basis for the September 2021 quarter, it said.

In FY21, the GDP had contracted by 7.3 per cent due to the pandemic. For FY22, the Reserve Bank of India expects GDP to clock a growth of 9.5 per cent, which will slow to 7.8 per cent in FY23. The GDP had expanded by over 20 per cent for the first quarter on the lower base, according to a news agency.

The official data for the second quarter is set to be released on November 30. The report by HDFC Bank said some part of the expected 7.8 per cent GDP growth in the second quarter will be due to a low base from a year when the economy contracted by 7.4 per cent but there is likely to be a sequential improvement in GDP growth in Q2 FY22.

On a sequential basis, GDP is expected to grow 9.75 per cent in Q2 from a contraction of 16.9 per cent in the second wave-hit previous quarter, reflecting a revival in economic activity.

"With support from pent-up demand and easing of mobility restrictions in the country, economic activity (as captured by a number of high frequency indicators) moved above pre-second wave levels in early August and has remained robust since then," the report said.

When looked at from a gross value added (GVA) basis, the September 2021 quarter growth will come at 7.3 per cent, the bank estimated, explaining that the gap between GDP and GVA is likely to be driven by higher tax revenue collection and lower subsidy pay-outs in this quarter.

Fibre2Fashion News Desk (DS)

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