New Delhi: India’s economy is all set to expand a notch quicker than previously estimate in the current fiscal year ending March, says a latest Bloomberg survey.
The gross domestic product (GDP) will likely reach 9.4 per cent this fiscal year, according to the median estimates of the latest survey. That’s faster than 9.3 per cent forecast last month and is primarily because of an upward revision to the third- and fourth-quarter estimates to 6 per cent and 5.8 per cent from 5.8 per cent and 5.3 per cent, respectively.
This suggest that economic activity is picking up in India, Asia’s third-largest economy, which has shrugged off most restrictions put in place to stem a deadly second wave of the Covid-19 pandemic.
While there are no new strict curbs in place to check the omicron variant, policy makers have retained an accommodative stance to support the recovery, according to the survey.
“The third quarter results underline India’s ability to shrug off the negative impact of the second wave in second quarter relatively quickly,” said Wouter van Eijkelenburg, 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 service sector will probably be the main beneficiary as a result of lower government imposed restrictions.”
In the meantime, record high November wholesale-prices at 14.23 per cent are estimated to ease to 13.46 per cent in December. However, longer term FY22 and FY23 forecasts were raised to 12 per cent and 6.5 per cent compared to previous month’s 10.4 per cent and 4.75 per cent.
“Persistently high core inflation complicates the RBI’s monetary policy making at the time of nascent economic recovery,” said Tuuli McCully, head of Asia-Pacific economics at Scotiabank. “While monetary policy is set to stay growth-supportive in the near term, we assess that inflationary pressures and financial stability considerations will prompt the RBI to commence a cautious monetary normalisation phase by mid-2022.”
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