Care Ratings has lowered its India GDP growth forecast to 10.2% for FY22 following fresh lockdowns imposed in parts of the country to control the pandemic.
On March 24, it had projected growth for FY22 to be in the 11-11.2% range based on Gross Value Added (GVA) growth of 10.2%, and on April 5, a day after Maharashtra imposed restrictions, it further lowered its GDP forecast to 10.7-10.9%.
“With conditions changing very swiftly it does become imperative to revisit these numbers more often to get a better sense of the future; and the picture shows a 1% dip from our forecast on March 24, 2021,” it added.
Earlier this month the RBI had stuck to its FY22 GDP forecast of 10.5% despite the surge in infections.
CARE had earlier projected GVA to increase to ₹136.82 lakh crore (FY22) from ₹124.11 lakh crore (FY21). “With a potential fall in output of ₹1.13 lakh crore, GVA will be ₹135.69 lakh crore and growth will be 9.3%,” it said.
“As tax collections too would be affected, there would be an impact on GDP growth which is now placed at 10.2%. Therefore, the loss in GDP this year due to the lockdowns would be to the extent of 0.8-1% from our earlier estimate of 11-11.2%,” it added.
It said consumption as a whole would fall and all of this decline will not be compensated for during the course of the year unlike last year.
Stating that there would be more testing for COVID-19 cases in May, it said, “The elections in various regions and the Kumbh Mela are two events which have the potential to increase the case-spread which can bring in stringent measures from the States.”
