SBI economists revise India's FY22 GDP growth to 7.9% from 10.4%

02 Jun '21

2 min read

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The economists from State Bank of India (SBI) have revised India’s GDP growth estimate for fiscal 2021-22 to 7.9 per cent from the earlier projection of 10.4 per cent due to the disproportionately larger impact of the second wave of the COVID-19 pandemic on the economy. The leading public sector bank is also pitching for faster vaccination in the country.

The rural areas of India are not as resilient as the urban areas, which is why the pick-up in pent up demand will not make a large difference to the GDP estimate of FY22. Thus, it could be a modest pick-up, media reports said quoting the SBI economists.

The increasing international commodity prices will also impact the GDP growth of India, the economists said. However, at ₹145.8 trillion, the real GDP for FY22 will be slightly higher than in FY20. It will be a ‘W-shaped’ recovery with two troughs as opposed to the earlier anticipated ‘V- shaped’ recovery.

The economists also said that an upward bias to the estimate of 7.9 per cent is possible if government successfully vaccinates 10 million people a day by mid-July.

India’s economy grew at 1.6 per cent in Q4 FY21, resulting in a contraction of 7.3 per cent for FY21, according to official data.

The RBI has maintained its growth estimate of 10.5 per cent even after the emergence of the second wave.

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