India's Q3FY22 GDP is expected to grow at 6.2 per cent on a year-on-year basis due to a broad-based, base effect-led moderation, as per ratings agency ICRA.
The expected YoY growth of the GDP and gross value added (GVA) at basic prices at constant 2011-12 prices in Q3FY22 will display a broad-based, base effect-led moderation to 6.2 per cent and 6 per cent, respectively, it said.
In Q2FY22, the GDP grew by 8.4 per cent and 8.5 per cent, respectively. Besides, ICRA projected the GVA growth in services, industry, and agriculture, forestry and fishing at 8.2 per cent, 4.2 per cent and 2.5 per cent, respectively, in Q3FY22.
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ICRA Chief Economist Aditi Nayar said: "The economic recovery gained some traction in Q3 FY2022. Rising vaccine coverage and confidence levels instigated a cautious revival in the contact-intensive sectors.
"Additionally, robust merchandise and service sector exports supported economic activity in Q3 FY2022. While the YoY performance of manufacturing volumes was surprisingly feeble, price hikes protected margins in some sectors in that quarter."
Nayar said that even as a normalising base is expected to dampen the YoY growth in GDP in sequential terms, the performance relative to the pre-Covid level is likely to have improved markedly in Q3FY22.
"Relative to pre-Covid, growth in the GDP and the GVA is projected to have risen substantially in Q3 FY2022 to 6.6 per cent and 7.1 per cent, respectively, from 0.3 per cent and 0.5 per cent, respectively, in Q2 FY2022," she said.
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"Nevertheless, the recovery did not attain durability, with a slide in mobility and the contact-intensive sectors in January 2022 amidst a mildly disruptive third wave of Covid-19. Additionally, the rebound in commodity prices is likely to compress margins in the ongoing quarter, further weakening the YoY GDP and GVA growth."
ICRA also said that nascent recovery in the contact-intensive services suggest that trade, hotels, transport, communication and services related to broadcasting would be the only sub-sector avoiding a base effect-led dip in growth in Q3FY22.
