The economy is likely to record a 9.5 per cent growth this fiscal over 7.3 per cent contraction last year, as the ongoing recovery is faster and more credible than earlier foreseen, according to a foreign brokerage report. It will gather more momentum in the second half of the current fiscal, but will slow down to 7.7 per cent next financial year, it added.
The government has budgeted for a 10.5 per cent growth this fiscal, but the Reserve Bank has scaled it down to 9.5 per cent. Ravaged by the pandemic, the economy tanked 7.3 per cent last fiscal, the worst and the third contraction on record.
Swiss brokerage UBS Securities India expects the economy to gain momentum in the second half on cyclical tailwinds, including pent-up demand and favourable external demand.
We expect real GDP to grow at 9.5 per cent in FY22, but to lose the momentum to 7.7 per cent next fiscal. We expect growth to gain momentum in the second half on cyclical tailwinds including pent-up demand, especially after more people are vaccinated, favourable external demand as exports are over 25 per cent the pre-pandemic level) and higher government spending and the likely resultant spike in Capex, Tanvee Gupta Jain, chief economist at UBS Securities India said in a report on Monday.