Q2 GDP data to be released today. SBI estimates 10.7% contraction

The National Statistical Office (NSO) will release GDP statistics for the quarter ending September today. While RBI's 'nowcasting' model expects GDP to contract by 8.6%, SBI has revised its second-quarter (Q2) GDP to -10.7% from -12.5% with a positive bias citing continuous improvement in business activity index. SBI report released on Friday further adds that owing to better business activity numbers 'Q3 numbers could be even better'.

The report titled, "Sbi Composite Index recovers, GST collections expected at ₹1.08 Lakh crore in Nov’20 & Gdp in Q2 estimated to be -10.7% with a +ve bias," was authored by Dr Soumya Kanti Ghosh, SBI's Chief Economic Adviser.

"After witnessing decline of 23.9% in real GDP in Q1 FY21, we expect Q2 GDP growth at -10.7% (earlier: -12.5%) with positive bias, based on our ‘Nowcasting’ model with 41 high frequency indicators, associated with industry activity, service activity, and global economy.," stated the report.

"The yearly SBI Composite Index has now reached 19-month high of 53.9 (Moderate Growth) in Nov’20, compared to 53.0 (Moderate Growth) in Oct’20, and 50.8 (Low Growth) in Nov’19. The monthly index touched the all time high of 62.1 (High Growth) in Nov’20, compared to 59.3 (High Growth) in Oct’20 and 49.96 (Low Growth) in Nov’19," said the report.

SBI report projects Novembers GST collections at 10-month high of ₹1.08 lakh crore as compared to ₹1.05 lakh crore in October. "The Nov’20 collections will be very close to Jan’20 collections ( ₹1.10 lakh crore). The excellent improvement in GST is mainly due to traction in economic activities and services in festive month of November," it said.