ICRA pegs This autumn GDP progress 2%; FY21 contraction at 8.45%

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The domestic rating agency ICRA forecast on Monday an increase in growth of 2 percent in March-FY21 and of 3 percent from the point of view of gross value added.

This would mean avoiding the NSO projection of a double-dip contraction.

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The agency has estimated the annual decline at 8.45 percent.

The chief economist Aditi Nayar expects an annualized GDP growth of 2 percent for the March quarter after 0.40 percent in the December quarter.

The agency projected GVA growth of 3 percent for the fourth quarter of FY21, compared to 1 percent in the third quarter, suggesting that the double-dip recession implied by the National Bureau of Statistics (NSO) for the fourth quarter will be averted.

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“We forecast that GDP growth will lag behind the GVA expansion in the fourth quarter due to the estimated impact of the government’s retrospective release of subsidies. Given the latter, we believe the trend in GVA performance could be a more telling measure of economic recovery in the fourth quarter, ”said Nayar.