FY21 GDP to contract at 7.4% on better recovery: SBI report

India’s GDP growth is expected to be at 7.4 percent in FY21 on better than projected recovery, said a SBI research report, upgrading its earlier forecast of (-) 10.9 percent.

The report also believes that it would take seven quarters from the fourth quarter of FY21 for GDP to reach the pre-pandemic level in nominal terms.

“We now expect GDP decline for the full year (FY21) to be in single digits at 7.4 percent (compared to our earlier prediction of (–) 10.9 percent), aligned with RBI and markets” revised forecasts post Q2,” SBI said in its research report – Ecowrap.

It said the revised GDP estimates are based on SBI ”Nowcasting Model” with 41 high frequency indicators associated with industry activity, service activity, and global economy.

Based on this model, the forecasted GDP growth for third quarter would be around 0.1 percent (with downward bias), it said.