Downgrades India FY22 GDP Forecast to 9%, Says CITI

India’s gross domestic product (GDP) is now expected to grow at 9% in the third quarter of the current fiscal owing to the slowing economic momentum and Omicron uncertainties, rating agency Citi has said in its report. It has further downgraded the FY22e GDP forecast from 9.8% forecast earlier.

Citi has also revised the FY23E real GDP forecast from 8.7% earlier to 8.3%.

“While the economic impact of the Omicron wave in 4QFY22 could be much lower than previous waves, the activity momentum in 3QFY22 was much lower than our expectation,” Citi said in its report. The report says that the third wave of Covid-19 has commenced in India. “Although the case increase has been very sharp, there are reasons to be hopeful of a less-disruptive Covid wave,” the report said.

The reasons include lower hospitalisation rates, shorter covid wave cycle period, higher vaccination coverage and weakening link between covid and economic activity, the report said. (Economic Times)