• According to the median forecast in a Bloomberg survey, GDP will grow 8.7% from a year ago in the year to March 2022.
• Growth will slow due to an increase in omicron infections and temporary activity limits. Last year, India’s economy developed at a slower pace than originally projected, with virus restrictions in the fourth quarter considered as a drag on business, while the European war has put a new inflation challenge to the recovery.
According to the median estimate in a Bloomberg survey, gross domestic product climbed 8.7% from a year before in the year to March 2022. . This is lower than the Statistics Ministry’s forecast of 8.9% growth three months ago.
According to the survey, the economy grew at a rate of 3.9 percent in the January-March quarter, marking the lowest point of the year.
According to Rahul Bajoria, chief India economist for Barclays Plc, growth slowed due to an increase in omicron infections and temporary activity limits.
“Although the movement limitations were only temporary, additional challenges such as worldwide supply shortages and higher input costs slowed the growing speed.”
When a surge in Omicron cases in January reintroduced some of the virus’s restrictions, Asia‘s third largest economy had only begun to recover from the pandemic’s effects.
In February, the conflict in Ukraine contributed to the country’s troubles, driving increasing commodity prices and further limiting supplies.
In an off-cycle meeting earlier this month, India’s central bank was compelled to raise rates by 40 basis points due to rising prices. Governor Shaktikanta Das, who is scheduled to review monetary policy on June 8, has hinted at more hikes in order to keep inflation in check, a move that might weaken demand even more.
“Elevated commodity prices, slowing global growth and monetary policy tightening across most markets are likely to weigh on growth prospects,” said Teresa John, an economist with Nirmal Bang Equities Pvt in Mumbai.
“We continue to expect contact-intensive services to lead the economic recovery even as high commodity prices weigh on manufacturing margins.” According to the median estimate in a Bloomberg survey, India’s GDP slowed because to covid limitations before the conflict.
Data due today is expected to show gross domestic product rose 8.7% from a year ago in the year to March 2022. This is lower than the Statistics Ministry’s forecast of 8.9% growth three months ago.
On Wednesday, May 11, 2022, horses in Paharganj market in New Delhi, India. In response to rising inflation, India’s central bank will revise its inflation prediction at its June monetary policy meeting. According to a source familiar with the situation, rising commodity prices might pave the way for more interest rate hikes by August.
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