New Delhi, Nov 8 (Agency) Revising upward its earlier forecast, Brickwork Ratings on Monday said that it now expects India’s GDP to grow 10-10.5% in the current financial year on faster-than-expected revival in economic activities. The rating and research firm said that economy has been recovering well from the devastation caused by the second wave and most of the growth indicators are performing better on a year-on-year basis. Further, it expects the level of GDP to reach close to pre-Covid levels in Q2FY22. “We expect GDP growth for Q2FY22 at 8.3% (year-on-year), on the back of a 7.4% contraction in Q2FY21.
The subsequent quarters too will see recovery if there is no resurgence of the virus in the form of a third wave. Subsequently, we revise our GDP estimates for FY22 to 10-10.5% from 9% estimated earlier,” the rating agency said. It said that many economic growth indicators are suggesting a faster-than-expected revival in economic activities, instilling greater confidence in economic agents as the number of new COVID-19 cases declines and leading to a sustained improvement in growth prospects. “Most states have already relaxed restrictions on economic activities; with the progress achieved in vaccinating a sizeable proportion of the population, economic activities are likely to gather momentum,” said Brickwork. The rating agency sees the ongoing recovery as broad-based with both manufacturing and services activities expanding. The manufacturing PMI was at an eight-month high of 55.9 in the month of October while the services PMI came in at 58.4, the strongest in ten-and-a-half years.
As government has scaled up capex in recent months, the growth is set to get accelerated. Pent-up demand during the festival season is likely to improve demand conditions further, paving the way for improved capacity utilisation during the third and fourth quarters. Brickwork sees agriculture, forestry and fishing sector growing at 4.3% in FY22 while industry registering a 14.5% jump in the current fiscal. Services sector comprising trade, hotels, transport, storage and communication, financial services, real estate and professional services, public administration, defence and other services is estimated to grow at 7.8% in FY22.