By Prerana Bhat and Tushar Goenka
BENGALURU (Reuters) – The Indian economy likely grew at a slower pace in the final quarter of 2021, primarily attributable to lacklustre manufacturing output and funding, in line with economists in a Reuters ballot.
Asia’s third largest economy expanded 6.0% in the October-December quarter in contrast with the identical interval from a yr in the past, the median forecast of 38 economists polled Feb. 21-23 confirmed, dropping extra steam even earlier than disruptions from the Omicron variant of the coronavirus got here into play.
The economy expanded 20.1% in the April-June quarter and eight.4% in July-September, largely as a result of of weak performances in the identical quarters in 2020 when the pandemic took maintain.
“The industrial manufacturing numbers, particularly capital and infrastructure items manufacturing, level to a considerable slowdown (in 2021 This fall),” mentioned Miguel Chanco, senior Asia economist at Pantheon Macroeconomics.
India’s Industrial output grew a mere 0.4% in December, a a lot slower pace than anticipated.
“The type of rebound in Q3 after the Delta (virus variant) wave in Q2 was by no means going to be sustainable. But in any case, the exhaustion of momentum in This fall notably on the funding aspect was fairly sharp, in order that’s the most important purpose for a a lot sharper slowdown,” Chanco added.
The newest 6.0% development estimate was additionally a downgrade from 6.3% anticipated a month in the past in a separate Reuters ballot. Ten of 15 widespread contributors downgraded their forecasts or left them unchanged. The remaining 5 upgraded.
Forecasts have been in a variety, from 3.0% to 7.5%.
The newest GDP information is due at 1200 GMT on Feb. 28.
“Growth charges will nonetheless be muddied by base results, so gauging momentum might be barely troublesome,” mentioned Dhiraj Nim, economist at ANZ.
Growth in the present January-March interval, partially crimped by restrictions attributable to Omicron, is projected at 5.0%, placing the monetary yr’s annual common at 9.2%, in line with a separate survey taken final month.
The Reserve Bank of India has been prioritising development and held rates of interest at report lows at its February assembly, regardless of inflation breaching the higher restrict of its goal vary.
“Economic exercise is predicted to broaden going ahead … Progressively the pandemic is taking much less of a toll on financial exercise. Seen from this angle, the RBI ought to have already taken the plunge to normalise financial coverage,” mentioned Prithviraj Srinivas, chief economist at Axis Capital.
(Reporting by Tushar Goenka and Prerana Bhat, Polling by Devayani Sathyan and Shaloo Shrivastava, modifying by Mark Heinrich)
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