Brokerage firm Nirmal Bang Equities Private Limited expects India's GDP growth for Q4FY22 at 4.2 percent year-on-year (YoY), while GVA growth is pegged at 3.7 percent YoY.
The brokerage firm has maintained its GDP forecast for FY22 at 9.2 percent while the GVA may grow at 8.8 percent.
The brokerage firm has cut its GDP forecast for FY23 to 7.5 percent from 8 percent earlier, as elevated commodity prices, slowing global growth and monetary policy tightening across most markets are likely to weigh on growth prospects.
"We continue to expect contact-intensive services to lead the economic recovery even as high commodity prices weigh on manufacturing margins. Prospects for rural and agricultural growth also seem better than earlier anticipated, helped by improving realisations of farm commodities," Nirmal Bang said.
Agriculture and allied sector growth are likely to come in at 2.5 percent YoY in Q4FY22. Industry output (excluding construction) is likely to decline by 1.2 percent YoY as shortages and higher input prices weigh on manufacturing sector margins and consequently growth," the brokerage firm said.
The brokerage firm further added that services output (including construction) is likely to grow by 6 percent YoY in Q4FY22, slowing from 6.7 percent in Q3FY22 and up from 3.2 percent in Q4FY21.
"While Omicron-related restrictions weighed on contact-intensive services, this was partially offset by relatively strong performance in the construction sector and robust government spending. Financial Services have also seen stable performance in Q4FY22," said Nirmal Bang.
Many brokerage firms and rating agencies have trimmed India's growth forecast due to higher inflation and rate hikes.
S &P Global Ratings on May 18 trimmed India’s FY23 growth forecast to 7.3 percent from 7.8 percent projected in March, considering higher commodity and crude oil prices, inflation, and the Ukraine war. The country, however, will remain the fastest growing major economy in the world.
Inflation in the US, UK and India are at a multi-year high level. Central banks across the globe have been signalling aggressive rate hikes in the coming months which may hit the global growth.
A sharp jump in crude oil prices is a matter of serious concern for India as the country is one of the biggest importers of crude oil.
Disclaimer: The views and recommendations made above are those of broking firms and not of MintGenie.
