Barclays slashes GDP growth forecast for FY 2022, attributed to local lockdown. Global brokerage firm Barclays has cut India’s GDP growth forecast for FY 2022.
Barclays lowered India’s GDP growth forecast for FY2022 to 10 percent from the earlier 11 percent due to the uncertainty created by the slow pace of vaccination and the rapid increase in infection rates and the death toll in the second wave of coronavirus.
The brokerage firm said that if the current local lockdown goes on until June, it would cause an economic loss of $ 38.4 billion.
Barclays warned that in the more pessimistic scenario of the epidemic if the control could not be achieved soon and restrictions on movement continue until August, the growth rate could fall to 8.8 percent.
The country’s economy is projected to shrink at a rate of 7.6 percent in FY 2021, as the nationwide lockdown caused by the epidemic halted economic activity and severely impacted demand and employment.
The low base was expected to result in a faster growth rate in FY 2022, but the second wave of the coronavirus epidemic and the local lockdown has caused many analysts are downgrading their forecasts.
The Reserve Bank of India has said that the economy will grow at a rate of 10.5 percent in this financial year.
Barclays analysts said, “As the second wave of the corona epidemic continues in India, there is increasing uncertainty about the number of infections and deaths.”
Slow vaccination is also affecting India’s recovery prospects. We reduce the GDP growth estimate for FY 2021-22 by one percent to 10 percent due to this uncertainty. ‘
Exports expected to be better despite the Corona crisis, encouraging demand from large markets of the world
Despite the outbreak of Corona infection in the country, exporters have expected the business to be better, given the encouraging demand in the big markets of the world.
SK Saraf, president of the Federation of Indian Export Organizations (FIEO), said that manufacturing and export services-related activities have been exempted from partial or total restrictions imposed by Corona in most states.
The central government has also given permission for inter-state movement of goods.
According to Saraf, the corona outbreak is causing some problems for the industry. The main reason for this is that the industries are not able to work with the full labor force.
We expect the second wave of Corona to weaken after the second week in May. This means that the situation can be expected to improve after that.
Indian industry and especially exporters are getting good demand from the big markets. In view of this, we expect better growth in exports.