India’s Q4 economic report card better than expected, GDP grows 1.6%; Experts decode GDP data

Though This fall noticed sturdy GDP progress, some do anticipate a reversal of the pattern within the present quarter owing to the extreme second wave seen in April and early Might.

India’s financial report card got here in with better-than-expected numbers because the GDP recorded a 1.6% progress within the January-March interval. The expansion figures have been higher than the 1% median forecast by 29 economists polled by Reuters. For the complete monetary 12 months 2020-21, the financial contraction got here in at -7.3%, higher than the federal government’s personal -8% estimates. The agriculture sector continued to develop steadily within the quarter, whereas development, electrical energy and different utilities posted sturdy progress. Though This fall noticed sturdy GDP progress, some do anticipate a reversal of the pattern within the present quarter owing to the extreme second wave seen in April and early Might.

Building, manufacturing sector shock

Govinda Rao, Chief Financial Adviser, Brickwork rankings: “Building and Manufacturing actions appeared to have picked up quicker within the final quarter of FY21 whereas the providers sector continues to undergo probably the most with Commerce, accommodations section estimated to contract by 15.5%.  The muted progress in public administration can be delaying the expansion revival.” 

Suman Chowdhury, Chief Analytical Officer, Acuité Scores & Analysis: “What catches our consideration, nonetheless, is the quarterly GVA print for Q4FY21. The manufacturing sector has delivered a 6.9percentYoY progress in This fall which regardless of the affect of the bottom issue, highlights the pickup in industrial exercise. Additional, the development sector has recorded a progress of 14.5percentYoY which in our opinion, signifies the impact of presidency capital expenditure. What’s pleasantly shocking is that the monetary, actual property and different providers additionally recorded a wholesome progress of 5.4% in Q4FY21.”

Binod Modi Head Technique at Reliance Securities: “Manufacturing and Constructions contributed considerably in 4QFY21 by rising 7% and 14% YoY, respectively and rising their GDP contribution by 50-90 bps. General, this quantity signifies sound prospects forward with weakening of the second wave.”

Second wave to hit restoration forward?

Deepthi Mathew, Economist at Geojit Financial Services: “The affect of the second wave of the pandemic might be seen within the GDP figures for Q1FY22 as a lot of the states  enforced lockdowns and different restrictions from April onwards.”

Madhavi Arora, Lead Economist, Emkay Global Financial Services: “The higher-than-expected Development print partly owes it to wholesome company ends in March quarter of FY21. We admit the state of affairs remains to be in a flux, and it’s too nascent to gauge the true affect of the second wave on macro variables. We consider that the affect is unlikely to be of the identical magnitude as final 12 months.”

Sreejith Balasubramanian, Economist – Fund Administration, IDFC AMC: “With the onset of the second wave, the important thing features actually are how would family earnings and consumption form up, the affect on and thus the contribution from the agricultural financial system this time and funding and lending behaviour.”

Suman Chowdhury, Chief Analytical Officer, Acuité Scores & Analysis: “While the second wave of Covid is more likely to affect these segments in Q1FY22, it’s clear that elimination of lockdowns and motion restrictions by June ought to assist the financial system pickup the misplaced progress momentum by Q2/Q3FY22 until we see a menace of third wave and so forth. We, due to this fact, proceed to carry our forecast of 10.0% GDP progress for FY22.”

Rumki Majumdar, Economist, Deloitte India: “With a majority of the States imposing strict lockdowns in April and Might, we anticipate the financial hurt of the second wave to stay contained to the April-June quarter. Financial exercise will decide up quickly within the second half of the FY. Elements akin to falling infections, a possible enhance within the tempo of vaccination, and the oncoming festivals within the following months will doubtless increase client and funding spending owing to sturdy pent-up demand.”

Reduction for RBI MPC

Nish Bhatt, Founder & CEO, Millwood Kane Worldwide – an Funding consulting agency: “The higher than anticipated GDP knowledge could have a constructive bearing on the RBI credit score coverage scheduled later this week. Shifting ahead, we anticipate progress charge to select up on again of newest reduction measures introduced by the federal government, phased unlocking by states, regular monsoon, excessive vaccination and decrease variety of new instances.”