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SBI Research ups projections for Indian economy, narrows GDP contraction to 7.4%

17 Dec 2020 Evaluate

SBI Research in its latest report has scaled up its projections for the economy, projecting gross domestic product (GDP) to contract 7.4 per cent during the current financial year (FY21) compared to its earlier forecast of a 10.9 per cent fall.

It said apart from Q3 FY21, the Q4 growth will also be in positive territory (at 1.7 per cent). However, all projections are conditional on the absence of another wave of infections. The author of the report, Soumya Kanti Ghosh, believes it would take seven quarters from the fourth quarter of FY21 for GDP to reach the pre-pandemic level in nominal terms.

He said the revised GDP estimates are based on SBI 'Nowcasting Model' with 41 high-frequency indicators associated with industry activity, service activity, and global economy. He said based on this model, the GDP growth for the third quarter would be around 0.1 per cent (with downward bias).

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