Domestic ratings agency ICRA on Monday forecast a 2 percent GDP growth in the fourth quarter of 2020-21, and a 7.3 percent contraction for the full fiscal year. From a gross value added perspective, the agency pegs Q4 growth at 3 percent and the fully year contraction at 6.3 percent.

This would mean that the NSO projection of a double-dip contraction would be avoided. The agency has projected a the full-year contraction at 7.3 percent. Its chief economist Aditi Nayar expects the annualised GDP growth at 2 percent in the March quarter, up from 0.40 percent in the December quarter. The agency has projected the GVA growth at 3 percent in Q4 of FY21, up from 1 percent in Q3, suggesting that the double-dip recession implied by the National Statistics Office (NSO) for Q4 would be averted.

 "We have forecast GDP growth to trail the GVA expansion in Q4, on account of the assessed impact of the back-ended release of subsidies by the government. Given the latter, we believe the trend in the GVA performance may be a more meaningful gauge of the economic recovery in Q4," Nayar said. The second Covid wave is likely to delay recovery in air passenger traffic with an 80-85 percent growth year-on-year this fiscal against the earlier estimate of 130-135 percent, ICRA said on Monday.

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