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ICRA raises country's FY22 GDP forecast to 9%; cites 'brightening' prospects

28 Sep 2021 Evaluate

Ratings agency ICRA in its latest report has raised the country's FY22 real GDP (gross domestic product) forecast to 9 per cent from 8.5 per cent earlier, citing the brightening prospects for H2FY22. The report said the country is benefitting from the rapid ramp-up in Covid-19 vaccine administration, healthy advance estimates of kharif output and the withdrawal of expenditure management measures related to the government’s spending.

The report stated the widening coverage of Covid-19 vaccines is likely to boost confidence, which will in-turn re-energise demand for contact-intensive services, helping to revive the portions of the economy affected most by the pandemic. Moreover, it said the robust kharif harvest is also likely to sustain the consumption demand from the farm sector.

It mentioned the expected acceleration in the central government spending after the withdrawal of the earlier cash management guidelines will recharge this key driver of aggregate demand.  ICRA expects GVA growth at 8.6 per cent, while CPI inflation to be between 5.3-55 per cent in FY22. WPI inflation is expected to remain at 10 per cent in the current fiscal year.

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