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India’s FY22 GDP growth expected at 9.5%, FY23 at 7.5%: Acuite Ratings

India’s FY22 GDP growth is expected at 9.5 percent with downside risks, said Acuite Ratings & Research on Thursday.

The rating agency cited the adverse impact of elevated commodity prices and the potential financial market volatility on account of monetary policy normalization as some of the downside risks.

“Expectedly, Omicron has led to a fresh dent in domestic economic activities which was also reflected in our proprietary AMEP (Acuite Macroeconomic Performance) monthly index which eased to 112.2 in Jan-22 from 115.0 in Dec-21,” Chief Analytical Officer, Suman Chowdhury, said.

“From a growth perspective, the index contracted sequentially by 2.5 percent MoM in Jan-22 from an expansion of 3.3 percent in Dec’ 21.”

However, the agency said that magnitude of the adverse impact has been much lower as compared to the previous pandemic waves given less severity of infections amidst robust vaccination coverage.

“Given the limited impact of the third Covid wave, we continue to expect FY22 GDP growth at 9.5 percent albeit with some downside risks from the adverse impact of elevated commodity prices and the potential financial market volatility on account of monetary policy normalization by key global central banks,” Chowdhury said.

“For FY23, we expect GDP growth at 7.5 percent amidst government’s strong thrust on infrastructure segment underscored in the Union Budget FY23, healthy progress on vaccination, a moderate recovery in rural consumption and the full play out of pent-up demand.”

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