Pic: Shutterstock
State Bank of India’s group chief economic adviser Soumya Kanti Ghosh recently said of the 41 high frequency leading indicators, 51 per cent are showing acceleration and that should help the economy turn around to the green from the third quarter with a 0.3 percentage point growth, which is likely to surprise positively when the final numbers are out.
SBI Research, which had earlier forecast a 7.4 per cent contraction in 2020-21 gross domestic product (GDP) numbers, has revised its contraction forecast for the current fiscal to 7 per cent. Ghosh said the projections are conditional to the absence of any rise in infections.
In April-September last year, the economy contracted 15.7 per cent, but the second half of this fiscal may see a surprise 2.8 per cent growth, according to the SBI analysis.
In April-June last year, the economy contracted by a record 23.9 per cent, but dramatically improved to -7.5 per cent in the second quarter. In 2019-20, the economy had grown 4 per cent and in the current fiscal year, it is on course to tank by 7 per cent.
The consensus is minus 7.5-8 per cent with the National Statistical Office pegging it at minus 7 per cent and Reserve Bank of India at minus 7.5 per cent, according to a news agency.
“We retain our GDP forecast for FY22 at 11 per cent (RBI has pegged it at 10.5 per cent and the economy survey at 11.5 per cent and the budget did not offer a GDP estimate), but with the caveat that 11 per cent will be the floor below which it cannot fall,” he said.
On the fiscal gaps, SBI said 9.5 per cent may be on the higher side. Excluding off-balance sheet liabilities, fiscal deficit will be 8.7 per cent gross tax collection estimate based on revised 2020-21 numbers and collections till December show tax collections will have a de-growth of 8.9 per cent in March quarter on a sequential basis.
But in 2021-22 collection may top the budget estimate of ₹22.17 lakh crore, or 9.9 per cent of GDP.
Meanwhile, cash balances of the central government has declined from the peak ₹3.4 lakh crore to around ₹2.3 lakh crore as on February 8.
Fibre2Fashion News Desk (DS)
State Bank of India's group chief economic adviser Soumya Kanti Ghosh recently said of the 41 high frequency leading indicators, 51 per cent are showing acceleration and that should help the economy turn around to the green from the third quarter with a 0.3 percentage point growth, which is likely to surprise positively when the final numbers are out.