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India’s GDP in Q2 FY22 grows at 8.4% on low base

Exports have been doing very well," said NR Bhanumurthy, Economist and Vice-chancellor of BR Ambedkar School of Economics.

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New Delhi: Helped by the low base and rise in economic activities post-second wave of the pandemic, India’s Gross Domestic Product (GDP) grew at 8.4% in the July-September quarter (Q2) of the financial year 2021-22.

As per data released by National Statistical Office (NSO), GDP at constant (2011-12) prices in Q2 2021-22 is estimated at Rs 35.73 lakh crore, as against Rs 32.97 lakh crore in Q2 of FY 2020-21, showing a growth of 8.4% as compared to 7.4% contraction in Q2 of FY 2020-21.

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“Quarterly GVA (gross value added) at basic prices at constant (2011-12) prices in Q2 2021-22 is estimated at Rs 32.89 lakh crore, as against Rs 30.32 lakh crore in Q2 2020-21, showing a growth of 8.5%, ” Ministry of Statistics and Programme Implementation (MoSPI) said in a statement.

Several economists and research firms had projected the Q2 GDP growth in the range of 7.8% to 8.5% with many of them scaling up their estimates on the back of better-than-expected high-frequency indicators such as higher GST collection, increase in power consumption and an uptick in bank credit.

Most economists expect the economy to remain on the growth trajectory in the remaining part of the fiscal on widening vaccination coverage and government focus on infrastructure building. They, however, see the new Coronavirus variant Omicron posing challenges in case it spreads.

“There is a mix of headwinds and tailwinds as far as near-term prospects are concerned,” said Aurodeep Nandi, India Economist & VP, Nomura Financial Advisory & Securities.

Nandi had estimated Q2 GDP growth at 8.1% and to be largely broad-based.

“All of us are betting larger growth in the third quarter. From October onward, much more positive news has been coming, much more economic activities have been happening. In fact, transport, trade, hotels and other services started functioning. Exports have been doing very well,” said NR Bhanumurthy, Economist and Vice-chancellor of BR Ambedkar School of Economics.

He noted that going forward the downside risk could be countries introducing stringent movement restrictions in the wake of new virus variants.

As per International Monetary Fund (IMF)’s World Economic Outlook (WEO) update in October, India is projected to grow at 9.5% in 2021 and 8.5% in 2022, the highest among major economies in both years.

India’s real GDP growth in the first quarter (April-June) of 2021-22 expanded 20.1 per cent, recovering more than 90% of the pre-pandemic Q1 output of 2019-20.

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