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ICRA raises Q2 FY22 GDP growth estimate for India to 7.9%

22 Nov '21

2 min read

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Due to a jump in Indian government spending in September, domestic rating agency ICRA has upgraded its gross domestic product (GDP) growth estimate for the second quarter (Q2) of fiscal 2021-22 (FY22) to 7.9 per cent. Its earlier estimate for real GDP growth for Q2 was 7.7 per cent. The GDP had grown by over 20 per cent in Q1 FY22 on a low base.

The Reserve Bank of India has forecast a 9.5 per cent growth rate in FY22.

"Economic activity in Q2 FY22 was supported by a pick-up in industrial and service sector volumes after the second wave of COVID-19 subsided and rising vaccine coverage revived confidence. Additionally, healthy central and state government spending, robust merchandise exports and continuing demand from the farm sector supported economic activity in that quarter," its chief economist Aditi Nayar said in a press release.

This would be an improvement when compared to the COVID second wave-hit first quarter of the fiscal, Nayar said.

A normalising base is expected to lead to a moderation in the growth when compared with the year-ago period, said ICRA.

The agency estimates growth by gross value added basis for the industry, services and agriculture, forestry and fishing to come at 8.5 per cent, 7.9 per cent and 3.0 per cent respectively for the second quarter.

Fibre2Fashion News Desk (DS)

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