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    SBI's Soumya Kanti Ghosh: Best way to look at GDP numbers is through GVA

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    SBI's Soumya Kanti Ghosh: Best way to look at GDP numbers is through GVA

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    Discussing the GDP numbers, Soumya Kanti Ghosh, Group Chief Economic Advisor at State Bank of India (SBI) said he looks at these numbers both positively and negatively.

    India's economy exits a technical recession as gross domestic product (GDP) growth turns positive in the third quarter. But for the full financial year, GDP could contract by 8 percent, which is worse than previous estimates and the government's budget forecast.
    Discussing the GDP numbers, Soumya Kanti Ghosh, Group Chief Economic Advisor at State Bank of India (SBI) said he looks at these numbers both positively and negatively.
    “The positive is that GDP is now in the positive territory for the first time and is in-line with our expectations. However, it is mostly investment lead recovery if you look at the numbers. The bad news is that the numbers are a little perplexing and there is a significant divergence in the estimates which has been revised.”
    The GVA is the key to look at the numbers, Ghosh added.
    “The best way to look at the numbers is through gross value added (GVA) right now because the GDP numbers are now volatile because of the tax and the subsidy debate as the government is cleaning up a lot of data.”
    Ghosh expects the Q4 GDP number should be positive.
    “Expect a lot of revisions in the data in the next couple of quarters.”
    Ghosh believes there is a good and broad-based recovery.
    “FY22 estimates are likely to be upgraded. In Q3, there was a significant uptick in the tender announcements which is a proxy for investment-led recovery and the corporate credit quality is perhaps getting better because the number of rating upgrades in the last four months is two times higher than what it was in the first four-five months of the current fiscal. So these two numbers would give us some solace that there is a recovery which is good and perhaps getting broad-based.”
    The fiscal deficit budgeted estimates—when it is finally revised in May would be significantly lower than 9.5 percent, Ghosh said.
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