Mumbai: The country’s gross domestic product (GDP) is expected to grow around 18.5 percent with the top bias in the first quarter of the current financial year, according to the SBI Research Report Ecowrap.
This estimate is lower than the projected growth in Bank of India (RBI) GDP (RBI) of 21.4 percent for April-June quarter.
“Based on our ‘Nowcasting’ model, the growth of GDP estimated for Q1 FY22 will be around 18.5 percent (with bias up),” said the report.
Higher growth in the second quarter of 2022, or Q1 FY22 mainly due to a low base.
The Indian state bank has developed a ‘Nowcasting model’ with 41 high frequency indicators associated with industrial activity, service activities, and global economy.
The report estimates that gross added value (GVA) is 15 percent in Q1FY22.
The company’s results announced so far showed that there was a substantial recovery in the GVA Ebidta company (Profit before interest, tax, depreciation, and amortization + employee costs) in Q1 FY22, he said.
The report said the GVA company from 4,069 companies registered a growth of 28.4 percent in Q1 FY22.
However, this is lower than growth in Q4 FY21, thereby strengthening lower GDP estimates than what beforehand, he said.
The next report said it would be recorded globally that lower mobility led to lower GDP and higher mobility to higher GDP, but the response was asymmetrical.
With a decrease in mobility, economic activity decreases and thus GDP growth, however, with increased mobility of GDP growth does not increase in the same proportion, he said.
“The relationship between the two has become weaker as can be seen in Q1 FY22 when mobility decreases, however, higher and positive GDP growth.
But higher Y-O-Y growth is mainly due to the basic effects,” said the report.
Meanwhile, the business activity index based on ultrahigh frequency indicators showed further increase in August 2021, with the latest reading for the week ended August 1621, at 103.3, he added.
The RTO collection (regional transportation office), electricity consumption along with the mobility indicator has been revived in Q2 FY22, shows a positive momentum in the future economic activity, the report said.