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Indian GDP to grow 7.8% in Q2, 9.4% in FY22: Report

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Real GDP will grow 9.4 percent in FY22 and decelerate to 7.5 percent for FY23 as the base effects result in the higher growth in the ongoing fiscal wear-off, according to the report by economists at HDFC Bank released on Wednesday.

Indian GDP to grow 7.8% in Q2, 9.4% in FY22: Report
Official data print on the GDP will show a 7.8 percent expansion on a year-on-year basis for the September 2021 quarter, according to a report. Real GDP will grow 9.4 percent in FY22 and decelerate to 7.5 percent for FY23 as the base effects result in the higher growth in the ongoing fiscal wear-off, according to the report by economists at HDFC Bank released on Wednesday.
In FY21, the GDP had contracted 7.3 percent due to the pandemic. For FY22, the RBI expects GDP to clock a growth of 9.5 percent, which will slow to 7.8 percent in FY23.
The GDP had expanded by over 20 percent for the first quarter on the lower base. The official data for the second quarter is set to be released on November 30.
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The report by HDFC Bank said some part of the expected 7.8 percent GDP growth in the second quarter will be due to a low base from a year when the economy contracted by 7.4 percent but there is likely to be a sequential improvement in GDP growth in Q2FY22.
On a sequential basis, GDP is expected to grow 9.75 percent in Q2 from a contraction of 16.9 percent in the second wave-hit previous quarter, reflecting a revival in economic activity.
"With support from pent-up demand and easing of mobility restrictions in the country, economic activity (as captured by a number of high-frequency indicators) moved above pre-second wave levels in early August and has remained robust since then," the report said.
Agriculture, forestry and fishing growth will come at four percent in Q2FY22, the industry will be at 6.3 percent and services at 8.6 percent, it added.
When looked at from a gross value added (GVA) basis, the September 2021 quarter growth will come at 7.3 percent, the bank estimated, explaining that the gap between GDP and GVA is likely to be driven by higher tax revenue collection and lower subsidy pay-outs in this quarter.
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