India’s Gross Domestic Product (GDP) is expected to grow by 8.7 percent in FY 2022. Motilal Oswal Financial Services (MoFSL) has claimed this in a recent report.
The report said that due to the second brutal Covid wave, we have revised our real GDP growth forecasts. We now expect real GDP growth of 21 percent in the first quarter of FY 2022 as compared to our March 2021 forecast of 30 percent year-on-year.
The report has estimated this in the second quarter of FY 2022 with some modifications below. It said, however, as Covid cases declined sharply in June 2021, some stagnant demand may be visible during the second half of 2022 and the first half of 2023.
Earlier it was estimated at 11.1 percent
As a result, we now estimate the real GDP growth rate to be 8.7 percent in the financial year 2022, which was earlier estimated to be 11.1 percent, the MoFSL report said.
However, it has revised its FY2023 forecast from 4 percent earlier to 5.4 percent. According to the report, although we have revised our actual growth forecasts, it is interesting to note that our nominal GDP growth projections have actually been raised marginally for FY 2022 and FY 2023.
Amendment of 4.5 percent
It is said that this is mainly because the GDP deflator – more tied to the WPI over the CPI – has been revised down to 6.5 percent or 4.5 percent for FY 2022 or FY 2023.
Consequently, it has said that the nominal GDP growth for the fiscal year 2022 is now projected at 15.6 percent.