According to a State Bank of India’s economic wing report, the strict mobility limitations and lockdowns imposed across important Indian cities will stifle economic growth and result in a financial loss of Rs 1.5 trillion (SBI).
A total loss of Rs 1.5 trillion is predicted, with Maharashtra, Madhya Pradesh, and Rajasthan accounting for 80% of the total. Dr Soumya Kanti Ghosh, the group chief economic adviser at SBI, wrote, “Maharashtra alone accounts for 54 percent.”
In light of this, SBI has cut its GDP forecasts for fiscal 2021-22. (FY22). The revised FY22 accurate GDP prediction (down from 11%) and nominal GDP projection (up from 14.3%) are now at 10.4% and 14.3%, respectively (earlier 15 per cent).
“Overall, we foresee a loss of sequential momentum in Q2-2021, but once the second wave passes (we expect July-September), pent-up demand should be released in the following quarters. Moreover, the economy should benefit from faster vaccinations after June, the lagged impact of easy financial conditions, front-loaded fiscal activism, and strong global growth.” Sonal Varma, managing director, and chief India economist at Nomura, wrote a recently co-authored note with Aurodeep Nandi.
