Domestic ratings agencies lower FY22 growth estimate to 8.5-9.3% on 3rd wave

Two domestic ratings firms on Thursday cut their projections on India's fiscal 2022 economic growth to 8.5-9.3% from 9.4-10% estimated earlier, citing a possible impact of the third wave of Covid-19 led by a more infectious Omicron variant.

Brickwork Ratings revised its estimate on India's GDP to 8.5-9% from 10%, while India Ratings & Research cut its forecast to 9.3% from 9.4%.

"For the full fiscal, we expect agricultural activities to be resilient as usual, while the manufacturing and services sectors will bear the brunt if the current situation prolongs further, Brickwork Ratings said.

For the fourth quarter, India Ratings estimates GDP growth to be 5.7% year-on-year. The new outlook is 0.4 percentage point lower than its earlier estimate of 6.1%. On Wednesday, ICRA shaved 0.4 percentage point off its previous estimate for January-March, and now projects the economy to grow 4.5-5% this quarter.