India’s GDP Likely to Grow at 18.5% in April-June Quarter this Fiscal: SBI report

According to SBI’s research report Ecowrap, India’s gross domestic product (GDP) is anticipated to expand at about 18.5% in the first quarter of this fiscal year, lower than the RBI’s forecast of 21.4%.

According to the study, “the predicted GDP growth for Q1 FY22 would be about 18.5% (with upward bias) based on our ‘Nowcasting’ model.”

The higher increase in the second quarter of 2022, or Q1 FY22, is mostly due to a low starting point.

According to the study, gross value added (GVA) is expected to be 15% in Q1FY22.

According to the first corporate statistics, corporate GVA EBIDTA (earnings before interest, taxes, depreciation, and amortisation) + employee cost) recovered significantly in Q1 FY22.

The ‘Nowcasting Model,’ established by the State Bank of India, includes 41 high-frequency variables related to industrial activity, service activity, and the world economy.

In Q1 FY22, the corporate GVA of 4,069 businesses increased by 28.4%. However, this is lower than growth in Q4 FY21, confirming the lower GDP estimate than previously assumed, according to the study.

It went on to say that when mobility falls, so does economic activity and therefore GDP growth; but, as mobility improves, GDP growth does not increase in the same proportion.

“The connection between the two has weakened, as seen by the fall in mobility in Q1 FY22, although GDP growth remains strong and favourable. However, the increased y-o-y growth is primarily due to the base effect, according to the research.

Meanwhile, the business activity index based on ultrahigh-frequency indicators increased in August 2021, with the most recent value of 103.3 for the week ended August 16, 2021, according to the report.

In Q2 FY22, RTO (regional transport office) collection, electricity consumption, and mobility indices all improved, indicating a favourable trend in economic activity moving forward, according to the study.