Q1 GDP growth likely slowed for the third consecutive quarter: Report – Times of India

BENGALURU: India’s financial restoration from the Covid-19 pandemic possible stumbled once more within the first quarter of this 12 months primarily as a result of Omicron-related restrictions and better inflation, a Reuters ballot confirmed.
Progress in Asia’s third-largest financial system was pencilled in at 4.0% for the January-March quarter from the identical interval a 12 months in the past in a Could 23-26 Reuters ballot of 46 economists, down from 5.4% in This autumn 2021. If realised, that will be the slowest in a 12 months, and a 3rd consecutive quarter of weaker progress.
Rahul Bajoria, chief India economist at Barclays, pointed to the surge in Covid-19 infections brought on by the Omicron variant of the coronavirus and the ensuing restrictions on exercise imposed by varied state governments.
“Whereas the motion restrictions have been short-lived, different headwinds from world provide shortages and better enter prices additionally impeded the tempo of enlargement,” he mentioned.
Forecasts for the info, due at 1200 GMT on Could 31, ranged broadly, from 2.8% to five.5%.
Economists additionally famous a part of the weak spot within the upcoming launch could be as a result of the next base one 12 months in the past. The federal government doesn’t formally launch quarter-on-quarter GDP information.
January-March was the ultimate quarter of 2021/22 fiscal 12 months. The financial system grew at 20.3%, 8.5% and 5.4% within the first three quarters of the monetary 12 months, respectively, which might be revised.
A separate Reuters survey final month estimated common progress for 2021/22 at 8.7%, decrease than the official second advance estimate of 8.9% launched on February 28.
The Reserve Financial institution of India, which had lengthy been specializing in progress over its inflation mandate, solely lately modified course and hiked its repo charge off document lows in an unscheduled Could assembly, with extra hikes to comply with in a bid to regulate worth pressures.
Most economists warned sticky inflation and excessive rates of interest might dent shopper spending, which might ultimately dampen India’s primarily consumption pushed financial system.
“The RBI will proceed to spotlight that total restoration has been respectable however there are dangers from elevated commodity costs and softer world progress going forward,” mentioned Dhiraj Nim, economist at ANZ.
“The influence of upper rates of interest as a result of excessive inflation is predicted to be internet damaging for progress.”

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