GDP may shorten at just 6 pc in FY22 if vaccine supply is delayed, says BofA

Jan 13 2021 06:10 PM
GDP may shorten at just 6 pc in FY22 if vaccine supply is delayed, says BofA

A delay in COVID-19 vaccine distribution could impact GDP growth prospects in the next fiscal year and the Reserve Bank of India may cut policy rates by 50 bps by June as inflation cools down, BofA Securities said on Wednesday.

The foreign brokerage said it expects GDP growth at 9 percent in 2021-22 if the vaccine distribution is done in the first half of the new fiscal year but may be just at 6 pc if the distribution is delayed to the second half, i,e October-March.

For the current financial year, it expects GDP to contract by 6.7 percent as against the government's estimate of 7.7 percent contraction. It can be noted that a slew of policy measures have been taken in the recent past including deep rate cuts, which had to be halted because of a surge in inflation to beyond the upper end of the range set for RBI.

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