India’s economic recovery likely strengthened in the previous quarter, boosted by service activity which recovered after pandemic-related mobility restrictions eased, a Reuters poll of economists found. .
The Nov. 22-25 poll of 44 economists put the median year-over-year growth forecast at 8.4% for the July-September period. The Indian economy grew by 1.6% and 20.1% in the January-March and April-June quarters, respectively.
The report will be released at 5:30 p.m. on November 30.
“After falling behind on recovery in the initial stages, the third quarter saw service activity catch up. Relative control over new infections and a sharp increase in vaccination helped improve activity services, ”wrote Rahul Bajoria, chief economist for India at Barclays.
“As supply shortages weighed on the manufacturing sector, the recovery in services reached higher heights in the last quarter.”
Respondents noted that these estimates, like the figures for the previous quarter, were flattered by a comparison with poor performance a year ago.
The latest 8.4% growth projection was an improvement from the 7.8% forecast in a Reuters poll conducted last month. The Reserve Bank of India has fixed growth for the same period at 7.9%.
But the forecasts of the latest Reuters poll were broad, ranging from 6.2% to 13.0%.
“It is a difficult road to travel for economic recovery, we believe that the recovery is more mechanical in nature, with a sustained growth engine that has not yet emerged,” wrote Kunal Kundu, Indian economist at Societe Generale , in a note to customers.
“This has been compounded by a lack of proper employment and income support given the poor fiscal response to the coronavirus.”
That hasn’t stopped some economists from saying that a reverse repo rate hike in December was now likely.
“The RBI must gradually give more weight to inflation, and particularly to high core inflation as growth normalizes while being able to respond with tightening measures depending on the evolution of national factors and global, ”said Abhishek Upadhyay, senior economist at ICICI Securities Primary Dealership. .
“We expect the economic recovery to be stronger than the RBI consensus and forecast, even with some downside risks.”
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