India’s real gross domestic product (GDP) is likely to maintain a 9 percent growth rate in fiscal 2022 and 2023, amid concerns over the Omicron variant of COVID-19, as per ICRA report. The Indian economy grew at 8.4 percent in the second quarter of the current fiscal, as against a growth of 20.1 percent in the April-June quarter.
"We are maintaining our forecast of a 9 percent GDP expansion in FY2022, with a clear K-shaped divergence amongst the formal and informal parts of the economy, and the large gaining at the cost of the small. "Looking ahead, we expect the economy to maintain a similar 9 percent growth in FY2023," domestic rating agency Icra Ltd Chief Economist Aditi Nayar said.
She expects the percentage of double-vaccinated adults to rise to 85-90 percent by March 2022. While the announcement of booster doses and vaccines for the 15-18 age group is welcome, it remains to be seen whether all the existing vaccines would offer adequate protection against the new Omicron variant to avert a third wave in India, Nayar said.
In any case, fresh restrictions being introduced by several states to curb the spread of COVID-19 may temporarily interrupt the economic recovery, especially in the contact-intensive sectors in Q4 FY2022, she added. Nayar, however, expects the expansion in FY2023 to be more meaningful and tangible than the base effect-led rise in FY2022.