SBI revises FY22 GDP projection to 7.9%

Economic research department of State Bank of India has published “Ecowrap 2021” report and revised real GDP projection for Financial Year 2022 to 7.9 percent from 10.4 percent earlier. Report highlights disproportionately larger impact of second wave of Covid-19 pandemic on economy.

Key Findings

  • It says, GDP outlook will be impacted by trajectory of international commodity prices in current financial year.
  • Pass-through impact of higher commodity prices will be visible in domestic prices which will also impact consumption.
  • Overall consumption trajectory will depend on recovery in services such as Trade, Transport, hotels, communication & services related to broadcasting, supporting 25 crore households.
  • Corporate reported better growth numbers in Q4 of Financial Year 2021. However, the trend might get reversed as per report.
  • Nominal loss of ₹4-lakh crore was reported in H1 (April 2020-September 2020) while 7.3 lakh crore reported in H2 (October 2020 – March 2021). Thus, overall annual loss was ₹6.1-lakh crore.

Impact of third wave

As per report, average duration of third wave for top countries is 98 days while that of second wave is 108 days. Third wave peak was in multiple of second at 1.8 and second wave as a multiple of first at 5.2 in those countries. While, in India it was at 4.2). Thus, it suggests intensity of third wave is severe. However, if India is better prepared, decline in serious case rate will decrease the number of deaths.

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