India’s economic growth in the first quarter of FY22 could be at a record high due to the weak base last year and a sharp rebound in consumer spending.
A recent poll of 41 economists conducted by news agency Reuters indicated that the gross domestic product (GDP) rose 20 per cent in the June quarter, compared to the record contraction of 24.4 per cent in the same period a year ago.
Growth in the first quarter of this financial year has been healthy despite the disruption caused by the second wave of the pandemic. This is because the economy was not completely lockdown during the second wave and states allowed some mobility amid strict restrictions.
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A few days ago, a report by the State Bank of India (SBI) had pegged India’s GDP to grow at 18.5 per cent in the June quarter on low base effect. “Based on SBI Nowcasting model, the forecasted GDP growth for Q1 FY22 would be around 18.5 per cent (with upward bias). The GVA is estimated at 15 per cent," the ecowrap report said.
Meanwhile, the Reserve Bank of India (RBI) has predicted the GDP in the first quarter to grow 21.4 per cent.
While economic growth is expected to rebound strongly in the first quarter of FY22, it is entirely due to the weak base effect and does not necessarily indicate a strong recovery.