India Ratings revises India’s FY22 GDP growth to 9.4%; links forecast to vaccination drive

The forecast could further slip to 9.1% if India is unable to vaccinate it’s entire adult population by December 31. However, if India does succeed then GDP growth is expected to be at 9.6%

“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,” said Ind-Ra.

Current estimates suggest that India would have to administer 5.2 million doses everyday, August 18 onwards, to fully vaccinate 88% of its adult population by March 2022.

In light of that estimate, Ind-Ra has revised its GDP growth for FY22 to 9.4%, as several high frequency indicators are showing a faster rebound than expected after the second COVID-19 wave has tapered off.

But kharif sowing is indicating a significant pick-up with the revival of south-west monsoon. Besides, exports volume and growth showed a surprise turnaround in 1Q FY22. Yet, FY22 GDP will be 10.9 per cent lower than the trend value.

“With the Covid-19 pandemic still looming large on the Indian economy, Ind-Ra believes households are no longer hopeful of a significant upside to their income in the near to medium term,” the agency said.

Coupled with low consumer confidence and depleted savings, this is expected to limit the growth in consumption demand.

At the same time, investments have been down and out over the past several years for a variety of reasons and are unlikely to see a near-term turnaround.

With inputs from ANI.