India’s GDP may make modest recovery in Sep quarter to grow at 6.8%: DBS

  • A favourable base effect (the economy contracted 24% during April-June 2020) will help produce a large positive growth number in the June quarter, but our nowcast model estimates those effects to fade somewhat in the September quarter, said DBS.

Asit Ranjan Mishra
First Published8 Jul 2021
The Reserve Bank of India has projected GDP to grow at 18.5% in the June quarter and 7.9% in the September quarter with full financial year growth at 9.5%.
The Reserve Bank of India has projected GDP to grow at 18.5% in the June quarter and 7.9% in the September quarter with full financial year growth at 9.5%.(Mint)

Even though the worst of the pandemic appears to be behind, India may see only modest improvement in economic activity in the September quarter of FY22 after a torrid second wave held back the country’s economic rebound in the June quarter, Singapore based DBS Bank said in a report released on Thursday.

“A favourable base effect (the economy contracted 24% during April-June 2020) will help produce a large positive growth number in the June quarter, but our nowcast model estimates those effects to fade somewhat in the September quarter, with growth easing to 6.8%. The risk to the outlook is characterized by contrasting factors—on the plus side, the export engine could hum owing to strong external demand; on the negative side, domestic consumption and investment could get postponed by mobility restrictions; high fuel prices can also be a potential drag,” DBS chief economist Taimur Baig said in the report.

The Reserve Bank of India has projected GDP to grow at 18.5% in the June quarter and 7.9% in the September quarter with full financial year growth at 9.5%.

“Mass vaccination will take many months, with only 5% of the population fully inoculated so far. Reopening the economy will have to be rather gradual as fears of a third wave of the pandemic, driven by the delta plus variant, have spread lately,” the DBS report said.

Despite ample liquidity, exceptionally low interest rates, and public sector support, private sector credit growth remains well below trend, DBS said. “India entered the pandemic on a weak ground, with the economy slowing substantially through the course of 2019. The resulting balance sheet stress continues to act as a drag on the economy, although attempts to revive manufacturing have caught the attention of global investors. Strong capital inflow and favourable external accounts have held India in good stead during this challenging year. Near-term economic prospects for India however have yet to brighten considerably,” Baig said.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.MoreLess
HomeNewsIndia’s GDP may make modest recovery in Sep quarter to grow at 6.8%: DBS

Most Active Stocks

Bharat Electronics

300.95
10:29 AM | 13 JUN 2024
10.4 (3.58%)

Tata Steel

182.50
10:29 AM | 13 JUN 2024
0.25 (0.14%)

GAIL India

219.75
10:28 AM | 13 JUN 2024
2.8 (1.29%)

Zee Entertainment Enterprises

164.95
10:22 AM | 13 JUN 2024
-1.9 (-1.14%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Usha Martin

414.40
10:23 AM | 13 JUN 2024
36.25 (9.59%)

Aegis Logis

839.60
10:26 AM | 13 JUN 2024
73.15 (9.54%)

Elgi Equipments

655.00
09:59 AM | 13 JUN 2024
51.25 (8.49%)

Praj Industries

685.85
10:20 AM | 13 JUN 2024
51.55 (8.13%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    73,441.00-219.00
    Chennai
    73,370.00139.00
    Delhi
    73,155.00353.00
    Kolkata
    72,797.00-577.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    99.84/L0.00
    Chennai
    100.75/L0.00
    Kolkata
    103.94/L0.00
    New Delhi
    94.72/L0.00
    OPEN IN APP
    HomeMarketsPremiumInstant LoanGet App