With many key activity indicators now either close to exceeding prior COVID levels, the simulated cyclical stance of Budget 2021 has further strengthened expectations of growth recovery in the next financial year. As such, over the past few weeks, various agencies, domestic and global, have steadily increased the volume of FY22 growth. According to Acuité Ratings & Research, GDP is expected to expand by a record 11 percent in the next fiscal year.
The Economic Survey recorded real GDP growth of 11.0% for FY 2012, followed by RBI’s estimate of 10.5% at the February 2013 monetary meeting. According to the IMF, India is expected to be the fastest growing economy in the world, expanding at 11.5%. In a similar vein, global rating agencies Fitch and S&P put FY22 GDP growth at 11% and 10% respectively.
In nominal terms, the central government calculated its budget based on GDP growth of 14.4% and Moody’s other major rating agency expected India to grow by 17%. While the range of real GDP growth forecasts varies widely between 10–15%, the double-digit expansion in FY22 is almost certain.
Growth prospects remain positive amidst lockdown restrictions, supportive fiscal and monetary policy environment, global reform and pent-up demand. COVID will promote further traction in the vaccine’s roll-out. However, commodity price increases can be seen.