India Ratings and Research (Ind-Ra) has slashed again India’s Gross Domestic Product (GDP) growth to 9.4 percent from 9.6 percent as it had estimated in June for current financial year (FY 22).
According to its revised forecast GDP would be 15.3 per cent in the first quarter, 8.3 per cent in the second quarter and 7.8 per cent in each of the remaining two quarters of the year.
However, in June, the rating agency had said that the GDP would grow by 9.6 per cent if the country is able to vaccinate its entire adult population by end of the year. But, “Going by the pace of vaccination, it is now almost certain that India will not be able to vaccinate its entire adult population by 31st December this year,” India Ratings’ Chief Economist Devendra Pant said.
Further, its principal economist Sunil Kumar Sinha said, of the four demand-side growth drivers, private final consumption expenditure (PFCE), government final consumption expenditure (GFCE), gross fixed capital formation (GFCF) and exports only GFCE has shown somewhat decent growth, averaging 5.7 per cent during FY’19-FY’21. Whereas, PFCE, GFCF and exports during this period grew 1.3 per cent, 1.5 per cent and 1.5 per cent, respectively.
Of the demand-side drivers, PFCE, proxy for consumption demand, is the largest component accounting for 58.6 per cent of the GDP in FY21, followed by GFCF accounting for 27.1 per cent, exports 18.1 per cent and GFCE 12.5 per cent, he further added.