Home Commodities omicron: Economists put Q4 growth at 3.5-5.5% on rise in commodity prices,...

omicron: Economists put Q4 growth at 3.5-5.5% on rise in commodity prices, Omicron


India’s economy is likely to have grown 3.5-5.5% in the fourth quarter of FY22 as higher commodity prices hit margins and the third Covid-19 wave disrupted the recovery, an ET poll of eleven economists showed.

The estimated median growth in the fourth quarter was 4.4%. The economy had grown 2.5% in the fourth quarter of FY21.

“Growth likely hit a road bump in the final quarter of FY22 on a high base as well as onset of the Omicron variant which had necessitated temporary localised mobility restrictions,” said Radhika Rao, executive director and senior economist, DBS Group Research, pencilling in 3.7% growth for the quarter.

The decline in wheat yields due to the heatwave and high base too impacted growth in the January-March quarter.

The National Statistical Office will release the Q4 and FY22 national account numbers on May 31. In the first three quarters of 2021-22, India‘s economy had grown 20.3%, 8.5%, and 5.4%, respectively. With a 4.4% growth in the fourth quarter, the full F22 GDP rise would be 9.2%.

« Back to recommendation stories

“Q4 FY22 was a challenging quarter, with the Omicron-fuelled third wave of Covid-19 arresting the momentum in contact-intensive services, and a pervasive pressure on margins from higher commodity prices,” said chief economist Aditi Nayar.

Both agriculture and industry are expected to post a sub 1% growth in the quarter ended March 31, 2022 whereas services growth will print at around 5.4%, aided by pent-up demand, economists said.

ICRA and

see FY22 GDP growth at 8.9% while has forecast an 8.8% year-on-year rise.

The second advance estimate released in February had pegged GDP growth in FY22 at 8.9% as compared to a contraction of 6.6% in FY21.

The Russia-Ukraine conflict that began on February 24, and renewed lockdowns in China in March led to a spike in global commodity prices.

While commodity prices were on the rise from earlier, Sunil Kumar Sinha, principal economist at India Ratings and Research said the conflict aggravated the situation in Q4.

expects a fourth-quarter GDP growth of around 5.5%. “Agriculture has been affected at the margin due to the rabi crop being lower for some products due to the early and excessive heatwave,” said Madan Sabnavis, chief economist, BoB.

Barclays said weakness in the rural economy persisted as workers moved from rural areas to urban centres for employment, and higher input costs and supply shortages weighed on both farming and non-farming activity.

“We forecast India’s economic growth slowed to 3.7% year-on-year,” said Rahul Bajoria, chief India economist, Barclays.

DBS’ Rao said besides sticky inflation slowing real income growth, the inclement weather and high commodity prices dampened growth.

This subdued reading is likely to be followed by strong double-digit growth in the June quarter on base effects.

Source link

Previous articleEU Commission publishes draft directive to remove tax driven debt-equity bias | Proskauer – Tax Talks
Next article4 Types of Investments You Should Be Considering


Please enter your comment!
Please enter your name here