ICRA expects India’s real GDP to expand

Credit ratings agency, ICRA, anticipates India’s economy to see double-digit growth at 10.1% in the FY22; while maintaining that in absolute terms the country’s gross domestic product (GDP) would only “mildly” surpass the levels of FY20. The agency had projected a 7.8% contraction during the ongoing fiscal, in line with the recently released first advance estimates of GDP by the Centre, which pegged the shrinkage in FY21 at 7.7%.

“The seemingly-sharp expansion will be led by the continued normalisation in economic activities as the rollout of Covid-19 vaccines gathers traction, as well as the low base,” stated Aditi Nayar, principal economist at ICRA. “We expect a multi-speed recovery in FY2022, with the contact-intensive sectors, discretionary consumption and investment by the private sector trailing the rest of the economy, in the arduous march back to attaining, and sustaining, pre-Covid levels,” she added.

The agency sees contact-intensive sectors, discretionary consumption and private investment lagging behind others in terms of recovery prospects during the coming fiscal.