InvestorQ : Why has the RBI cut its growth projection for India in FY22?
Arti Chavan made post

Why has the RBI cut its growth projection for India in FY22?

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Rutuja Nigam answered.
1 month ago
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RBI cut GDP growth for FY22 to 9.5% for prior forecast of 10.5%. The lowering of GDP projections comes due to the second wave of Covid and the slow progress on vaccinations. The GDP growth estimate is close to what leading economists have recently forecast and also looks pragmatic considering the pressure in the last few months. Moody’s has pegged estimated GDP growth for India at 9.3% for FY22 and 7.9% for FY23.

Interestingly, global bank Barclays has pegged India’s FY22 GDP growth at 7.7%, which is more like a worst-case bear scenario. That is assuming that India gets hit by the third wave of the pandemic going ahead. This could again impact production and normal economic activity for another 2-3 months with serious consequences. The consensus is of a deep impact in the first half and a sharp recovery in the second half of FY22.

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