NEW DELHI: As the government is all set to announce the fourth quarter GDP growth numbers for 2020-21 on Monday, predictions made by economists on Q4 numbers do not seem to give a very clear picture.
When The New Indian Express contacted brokerage firms, rating agencies and other institutions, the growth numbers they predicted ranged from a 1% contraction to a 2% growth.
Rating agency ICRA forecasts the fourth quarter GDP growth to be 2% while Societe General Corporate & Investment Banking (SGCIB) sees a contraction of 1%. Other predictions are within this range.
ICRA forecasts a pick-up in the growth of the Indian GDP (at constant 2011-12 prices) to 2.0% in Q4 2020-2021 from 0.4% in third quarter, suggesting that the double-dip recession implied by the National Statistics Office (NSO) for the fourth quarter has been averted. The NSO had predicted 1.1% Q4 GDP growth in 2020-21.
According to Aditi Nayar, Chief Economist, ICRA Ltd: “We peg the GDP growth for the just-concluded quarter at 2.0%, suggesting that the double-dip recession implied for Q4 FY2021 by the NSO’s 2nd Advance Estimates for FY2021, has been averted.”
On the other hand, Societe General Corporate and Investment Banking expects India’s real GDP to contract by 1.0% year-on-year in the fourth quarter mainly on account of prior period data revision.
“When it released the second advance estimate of 20-21 data in February, CSO revised the quarterly and full-year real GDP data for 2019-20. A 1 percentage point downward revision of third quarter of 2019-20 data translated into real GDP growth of 0.4% in the same quarter next year (2020-21). Had the Q3 data for 2019-20 remained unchanged, real GDP for Q3 2020-21 would have recorded a contraction of 0.6%. We expect a similar phenomenon to play out for the fourth quarter of 2020-21. On the basis of unrevised data, we had been expecting real GDP to grow by 0.4% yoy. But, the near one percentage point upward revision of Q4 of 2019-20real GDP would translate into a 1% contraction for 1Q21, unless we see another round of data revision,” explains Kunal Kundu, India Economist at SGCIB.
Then there are others like Crisil which estimate the fourth quarter GDP to grow at 1%, India Ratings which expects the GDP to grow at 0.6% and QuantEco Research which puts the Q4 GDP numbers at negative 0.4%.
Yuvika Singhal, economist, QuantEco Research, says that while they estimate annualized Gross Value Addition growth in Q4 to have expanded by 3.2%, led by stronger pickup in industry, a one-time food subsidy adjustment announced in the Budget getting reflected would result in the GDP growth to contract by -0.4%.