Mumbai: According to Ecowrap, a research report by SBI, the country’s Gross Domestic Product (GDP) is likely to grow at a rate of 5.8 per cent in the third quarter of FY 2022.
To surpass pre-pandemic levels, the country’s economy grew by 8.4 per cent in the second quarter of 2021-22. However, GDP growth in the July-September period was slower than the expansion of 20.1 per cent in the previous quarter.
The National Statistical Office (NSO) will announce the GDP estimates for Q3 FY 2021- 22 on February 28.
“As per SBI nowcasting model, the estimated GDP growth for Q3 FY2012 will be 5.8 per cent with a downward bias. The full year (FY22) GDP growth is now at 9.3 per cent from our earlier 8.8 percent from the estimate of Rs.
The Nowcasting model is based on 41 high frequency indicators linked to industry activity, service activity and the global economy.
Real GDP will be around Rs 2.35 lakh crore higher / 1.6 per cent higher than FY15’s real GDP of Rs 145.69 lakh crore, the report said.
The report said that recovery in domestic economic activity is yet to take place on a broader basis, as private consumption has remained below pre-pandemic levels.
Higher frequency indicators suggest that some weakening in demand in Q3 will also continue till January 2022, reflecting the drag on contact-intensive services.
Rural demand indicators, say two-wheeler and tractor sales, have continued to decline since August 2021.
Among urban demand indicators, sales of consumer goods and passenger vehicles declined in the third quarter, while domestic air traffic weakened due to the spread of the Omicron variant. While investment activity is showing an upswing, goods exports remain buoyant, it said.
The report said that this slow growth corroborates recent claims that early growth recovery needs to be supported by a longer than anticipated adjustment policy.
“Thus, we expect liquidity normalization to be delayed. This may further soften the impact on the yields of government securities (G-secs), which may be around 6.55 per cent or about 6.55 per cent from the current 6.7 per cent,” the report said. is more than that.”
The report suggested that the government could offer livelihood loans of up to Rs 50,000 to the rural poor.
This loan can be granted on the basis that interest-servicing alone will maintain the standard of the loan and subsequent loan renewals will be linked to the successful repayment record, it said.
“If the government bears 3 per cent interest subsidy on a portfolio of Rs 50,000 crore, the outlay during 2022-23 will be only Rs 1,500 crore. And these loans will also act as a major consumption booster at subsistence level,” it said. said.
The added benefit of these micro livelihood loans is that they will help the banking system to create a comprehensive database and credit history of marginal borrowers, which can be used to create new loan-worthy lending classes, the report said. .
The existing overdraft facility for PMJDY accounts in the banking system, which has been in existence for some time, may be streamlined and technology enriched with a central nodal agency/bank for monitoring and promotion of the scheme.
The report further noted that given the significant success of vaccination in the third wave in rural areas, livelihood credit could propel the broader economy to unprecedented heights.
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