The rating agency Moody in its August update to ‘Global Macro Outlook 2021-22’ projected India’s growth for calendar year (CY) 2021 at 9.6% and 7% for 2022. As per the update, the easing of COVID-19 restrictions gradually increases the growth in Indian economic activities.
G-20 (Group of Twenty) estimates:
i.They collectively grow by 6.2% as a whole in 2021 as against 3.2% contraction (-3.2%) in 2020. They will grow 4.5% in 2022.
ii.G-20 advanced economies will grow by 5.6% in 2021 while emerging economies will collectively expand by 7.2% in 2021.
Key Points:
i.It is expected that Reserve Bank of India (RBI) will follow the current policies till December 2021
ii.Indian economy contracted by 7.3% (-7.3%) in FY21. For FY22, the Indian GDP (Gross domestic Product) growth was expected in double digits but due to the second wave of the pandemic the projections have been trimmed.
iii.In June 2021, Moody’s Investors Service projected 9.3% growth for FY22.
Morgan Stanley retains India GDP growth estimate at 10.5% for FY22
An American multinational investment bank and financial services Morgan Stanley maintained its estimate of India GDP growth at 10.5% for FY22. As per the agency, by the end of Q2FY22 (quarter ending September2021) economic activities will start getting back to normal.
- These activities will be supported by strong demand, increase in vaccination, favorable policy mix and robust global growth.
Key Points:
i.GDP grew 20.1% year-on-year (y-o-y) in the Q2FY22 (quarter ending June 2021).
ii.On a two-year CAGR (Compound annual growth rate) basis, real GDP contracted 4.7% in Q2FY22.
iii.The agency cautioned to keep a watch on the pace of vaccination as any slowdown could increase risks and impact negatively on economic growth.
iv.On a seasonally adjusted sequential basis, GDP declined 6.3% due to the second wave of COVID-19 during April and May.
v.On the demand side, there is decrease in private consumption and fixed capital formation on a 2-year CAGR basis while government consumption and exports rose.
Recent Related News:
Care Ratings has estimated India’s GDP growth forecast in FY22 at the range of 8.8 to 9%. The Indian economy contracted by 7.3 percent (-7.3) in FY21.
About Morgan Stanley
Chairman and Chief Executive Officer (CEO)– James Gorman
Headquarters– New York, United States (US)
About Moody:
President & Chief Executive Officer (CEO)– Rob Fauber
Headquarters– New York, United States (US)
