You are here: Home » Economy & Policy » News
Business Standard

GDP growth to accelerate further to 9.8% in FY23: Goldman Sachs

The GDP is widely expected to grow at a faster pace due to the base effect in 2021-22

GDP | Goldman Sachs | Gross domestic product

Press Trust of India  |  Mumbai 

GDP Growth

Indian will grow at 8.5 per cent in 2021-22, and the rate will accelerate further to 9.8 per cent in 2022-23, a foreign brokerage said on Tuesday.

The had contracted by 7.3 per cent in the pandemic-hit FY21, and is widely expected to grow at a faster pace due to the base effect in 2021-22. The Reserve Bank of India (RBI) expects a 9.5 per cent growth in 2021-22, and the same to slow down to 7.8 per cent as things normalise.

"We expect consumption to be an important contributor to growth in 2022, as the economy fully re-opens driven by a notable improvement in the virus situation and adequate progress on vaccination," said in a report.

It expects government capital spending to continue, nascent signs of a private corporate capital expenditure (capex) recovery, and a revival in housing investment.

The American brokerage pegged the FY23 growth number to be higher, making its analysts one among the few to expect an acceleration in growth even after the base effect wears out.

Earlier in the day, analysts at British brokerage Barclays said FY22 growth will come at 10 per cent, and the same will slow down to 7.8 per cent in FY23.

said that as the growth catches up, the RBI will begin its policy normalisation, and expected cumulative rate hikes of 0.75 per cent in 2022. The central bank is currently in the second stage of the four-stage policy normalisation process, which began with 'less dovish' comments from the rate setting panel and will end with repo rate hikes, it added.

Concurring with the same view, Barclays also said the policy is already shifting to being less accommodative and there will be a hike in reverse repo rate at the upcoming policy review in December, which will be followed with rate hikes next year.

Barclays said Indian policymakers have been focused on managing growth risks for the past three years, stressing that the downturn had started before the onset of the pandemic itself, and added that the focus will now shift to managing financial stability concerns.

Inflation will decline in the second half of next year after being elevated and may result in an appropriate action by the RBI, it said.

Analysts at expect the headline consumer price inflation to rise to 5.8 per cent in 2022 from 5.2 per cent in 2021.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, November 23 2021. 23:04 IST