The country's gross domestic product (GDP) is likely to grow at 1.3 per cent in the January-March quarter of financial year 2020-21 and may witness a contraction of around 7.3 per cent for the entire fiscal year. According to a recent research report by the State Bank of India (SBI), titled 'SBI Ecowrap', the forecast for the economic growth in the fourth quarter is pegged at 1.3 per cent, with downward bias, based on the bank's nowcasting model. (Also Read: Economic Activity Dipped In April Amid State Lockdowns, Show Indicators )
According to the SBI Ecowrap report, going by the estimate of 1.3 per cent GDP growth, India will still remain the fifth-largest growing country among 25 nations that have released their GDP data numbers so far.
The e-National Statistical Office or NSO will release the GDP estimates for the March quarter of fiscal 2020-21, and the provisional annual estimates for the year 2020-21 on Monday, May 31, 2021. The State Bank of India, in its report, said that it expects the GDP decline for the full financial year 2020-21 to be around 7.3 per cent, compared to our earlier prediction of a 7.4 per cent contraction.
The state-run bank has developed a 'nowcasting model' with 41 high-frequency indicators associated with the industry activity, service activity, as well as the global economy in collaboration with the State Bank Institute of Leadership, Kolkata. (Also Read: Oxford Economics Lowers India's Growth Forecast To 9.1% From 10.2% For Fiscal 2021 )
Meanwhile, the economy snapped out of technical recession in the October-December quarter of the financial year 2020-21 and expanded by 0.4 per cent, after reporting two consecutive quarters of de-growth in the same fiscal. The GDP contracted by 7.3 per cent in the September quarter (second quarter) of the fiscal year 2020-21.
The Reserve Bank of India (RBI) Governor-led Shaktikanta Das Monetary Policy Committee, in its first bi-monthly monetary policy review for the new financial year 2021-22, retained its GDP growth projection at 10.5 per cent in the current fiscal 2021-22.