Indian economy to contract by 7% in FY21: SBI Research


2021-02-10 09:55:55

MUMBAI: Pencilling in a GDP growth in third and fourth quarters, SBI Research on Wednesday revised its contraction forecast for the current fiscal year to 7 per cent.
The agency had earlier forecast a 7.4 per cent contraction in 2020-21 GDP numbers. In April-September, the economy contracted 15.7 per cent but the second half may see a surprise 2.8 per cent growth, if the SBI analysis turns out to be correct.
Soumya Kanti Ghosh, group chief economic adviser at State Bank of India (SBI) said of the 41 high frequency leading indicators, 51 per cent are showing acceleration which should help the economy turn around to the green from the third quarter with a 0.3 percentage point growth which is likely to surprise positively when the final numbers are out.
In April-June, the Indian economy contracted by a record 23.9 per cent, but dramatically improved to -7.5 per cent in the second quarter. In 2019-20, the economy had grown 4 per cent and in the current fiscal year, it is on course to tank by 7 per cent.
The consensus is -7.5-8 per cent with the NSO pegging it at -7 per cent and RBI at -7.5 per cent.
“We now expect GDP decline for the full year to be around -7 per cent compared to our earlier prediction of 7.4 per cent. Also, Q4 growth will also be in positive territory at around 2.5 per cent,” Ghosh said, adding promptly that the projections are conditional to the absence of any rise in infections.
“We retain our GDP forecast for FY22 at 11 per cent (RBI has pegged it at 10.5 per cent and the economy survey at 11.5 per cent and the budget did not offer a GDP estimate), but with the caveat that 11 per cent will be the floor below which it cannot fall,” he said.
Corporate results so far also reinstate the fact that third quarter would be much better than the previous one. The corporate GVA of 1,129 companies has expanded by 14.7 per cent in October-December compared to 8.6 per cent in second quarter (of 3,758 companies ex-telecom)
On the fiscal gaps, it said 9.5 per cent may be on the higher side. Excluding off-balance sheet liabilities, fiscal deficit will be 8.7 per cent gross tax collection estimate based on revised 2020-21 numbers and collections till December show tax collections will have a degrowth of 8.9 per cent in March quarter on a sequential basis. But in 2021-22 collection may top the budget estimate of Rs 22.17 lakh crore, or 9.9 per cent of GDP.
Meanwhile, cash balances of the Centre has declined from the peak Rs 3.4 lakh crore to around Rs 2.3 lakh crore as on February 8.
Given that 85-90 per cent of such cash balances belonged to states that was invested with the Centre, it is possible that states before the closing of accounts of 2020-21 want to spend the cash rather than preserving.



Source link

31 Comments

  1. MarcosEtess March 5, 2021
  2. Michaelhom March 8, 2021
  3. Michaelhom March 9, 2021
  4. Michaelhom March 10, 2021
  5. JeffreyGog March 11, 2021
  6. JeffreyGog March 13, 2021
  7. JeffreyGog March 15, 2021
  8. Stanleycak March 16, 2021
  9. Stanleycak March 17, 2021
  10. ThomasHaf March 19, 2021
  11. ThomasHaf March 20, 2021
  12. ElmerJearo March 22, 2021
  13. ElmerJearo March 23, 2021
  14. Jasoncok March 25, 2021
  15. Jasoncok March 27, 2021
  16. Jasoncok March 29, 2021
  17. Scottrhync March 30, 2021
  18. Scottrhync March 31, 2021
  19. Scottrhync April 2, 2021
  20. Scottrhync April 3, 2021
  21. Stevenstazy April 5, 2021
  22. Stevenstazy April 6, 2021
  23. BillyViz April 7, 2021
  24. BillyViz April 8, 2021
  25. BillyViz April 9, 2021
  26. JamesBrivy April 10, 2021
  27. JamesBrivy April 11, 2021
  28. buy generic viagra online April 14, 2021
  29. JamesBrivy April 15, 2021
  30. JamesBrivy April 16, 2021
  31. JamesBrivy April 17, 2021

Leave a Reply