GDP Growth: Citi Slashes India’s Growth Forecast For FY 22 To 8.4%

India GDP growth: Citi on Wednesday reduced India’s Gross Domestic Product (GDP) growth forecast for the current financial year from 9 per cent to 8.4 per cent. For this, he has cited the GDP growth figures released by the Government of India for December 2021. The brokerage has also reduced the country’s GDP growth forecast from 8.3 percent to 8 percent for the financial year starting April 2022.

NSO estimates, growth will be 8.9 percent in FY22

A few days ago, official figures for economic growth were released, in which 5.4 percent GDP growth was said for October-December. The National Statistical Office (NSO) has projected 8.9 per cent GDP growth for FY22, up from 9.2 per cent earlier.

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Growth will be 2.9% in the fourth quarter: Citi

Citi expects a growth of 2.9 per cent in the fourth quarter of the current financial year, as against NSO’s forecast of 4.8 per cent for the quarter. 

“We expect growth in Q4 FY22 despite constraints related to Omicron, as high frequency activity indicators are already close to pre-Omicron levels,” the brokerage said. However, it added that activity in February-March is “less expected to remain strong enough.”

Citi expects India’s nominal GDP growth to be 18.8 per cent in FY22 and 13.4 per cent in FY23.

Improvement in urban consumption will support

Even though rural growth continues to be a problem with a slowdown in consumption growth, it is getting support from Social Security linked to budget spending. The capex, focused on the general budget, may support investments in FY23.

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Citi said that in the general budget, emphasis has been laid on increasing investment in the financial year 2022-23.

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