India’s GDP to Grow at 18.5% in April-June 2021 Quarter

SBI report Ecowrap noted that Indias GDP growth for the April-June quarter, aka Q1 FY22, would be around 18.5%.

“Based on our 'Nowcasting' model, the forecasted GDP growth for Q1 FY22 would be around 18.5% (with upward bias),” the report said.

This is lower than the Reserve Bank of Indias (RBI) estimate of 21.4%. The higher growth in the June 2021 quarter is a result of a low base, said the SBI (NS:SBI) report.

Corporate results of 4,069 companies showed a growth of 28.4% in the quarter. It said that there was a strong increase in corporate GVA EBIDTA (earnings before interest, taxes, depreciation, and amortization + employee cost) in Q1 FY22. However, the 28.4% growth was lower than the number in Q4 FY21.

Economic activity in the country declined because of the lockdowns that lasted from mid-April to mid-June. This led to a drop in GDP. While mobility picked up in the country, GDP growth doesnt increase at the same rate, the report said.

“The relationship between the two has become weaker as can be seen in Q1 FY22 when mobility has declined, however, GDP growth is high and positive. But higher y-o-y growth is mainly on account of the base effect,” the report said.