How is the GDP growth for the September quarter likely to be?

The actual GDP growth for the second quarter of FY22 ended in Sep-21, will be announced on the last working day of November i.e. 30-Nov. However, early polls done by Reuters indicate that there could be a sharper recovery than expected. According to the Reuters survey of economists, the economic recovery likely strengthened in the Sep-21 quarter, largely on the strength of a surge in services activity.

The sample of 44 economists included in the Reuters poll pegged the median growth forecast for GDP growth in the second quarter at 8.4% annualized. GDP had expended by 1.6% in the Mar-21 quarter and by 20.1% in the Jun-21 quarter. The Sep-21 quarter saw a sharp catch up by the services activity on the back of rapid spread in the vaccination drive across India. Manufacturing was still plagued by supply side constraints.

However, the general view is also that the numbers may be a tad misleading due to the weak base effect. This is also higher than the RBI estimate of GDP growth for the Sep-21 quarter at 7.9%. However, some economists have pointed out that the weak fiscal stimulus of late and the jobs data may be cause for concern. However, most of the economists polled appeared to be wary of a likely repo rate hike during the Mar-22 quarter.