India’s Gross domestic product (GDP) is estimated to grow at the “deceptively high” level of 20 percent for the April-June quarter but would still remain far below the pre-COVID level, rating agency ICRA said on Wednesday.
ICRA said the low base of the last year, when the GDP had contracted by close to 24 percent, "conceals" the impact of the second wave of COVID infections. Economic activity is boosted by robust government capital expenditure, merchandise exports and demand from the farm sector, it said, estimating the GDP to grow by 20 percent and the gross value added will register a growth of 17 percent for the June quarter. The GVA is estimated to contract 15 percent when compared to the preceding March quarter, which shows the impact of the second wave. "The double-digit expansion expected in Year-on-year terms in Q1FY22 is deceptively high, as it benefits inordinately from last year's contracted base. We forecast GDP to have shrunk by around 9 percent each in Q1FY22, relative to the pre-Covid level of Q1FY20, highlighting the tangible distress being experienced by economic agents in the less formal and contact-intensive sectors," its chief economist Aditi Nayar said. The RBI expects the GDP to expand by 21.4 percent in the quarter as per its revised estimates released earlier this month. The official data on economic activity from the central statistics office is expected by end of the month.
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