India Ratings revise India’s FY22 GDP forecast to 9.4%

In June the agency had estimated 9.6% year-on-year (YoY) growth in FY22 adding that it may slip to 9.1%.

India Ratings and Research on Thursday revised its FY22 GDP forecast to 9.4 per cent from 9.6 per cent saying that while high-frequency factors indicate a strong recovery than expected, India may not be able to vaccinate its entire adult population by the end of the year.

“Going by the pace of vaccination, it is now almost certain that India will not be able to vaccinate its entire adult population by December 31, 2021,” Principal Economist Sunil Kumar Sinha said in an official statement.

The agency’s estimate suggests that 5.2 million daily doses would have to be administered from 18 August 2021 onwards to fully vaccinate more than 88% of the adult population as well as to administer single doses to the rest by 31 March 2022.

“Accordingly, India Ratings has revised its GDP growth for FY22 to 9.4% because with the ebbing of the second wave of COVID-19, several high-frequency indicators are showing a faster rebound than expected, Kharif sowing is indicating a significant pick-up with the revival of south-west monsoon and exports volume and growth showed a surprise turnaround in 1QFY22. Yet, FY22 GDP will be 10.9% lower than the trend value.” He said.

In June the agency had estimated 9.6% year-on-year (YoY) growth in FY22 adding that it may slip to 9.1%. “If India is able to vaccinate its entire adult (18+) population by 31 December 2021, then the GDP growth is expected to come in at 9.6% YoY in FY22, otherwise it may slip to 9.1%.”

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