“We are maintaining our forecast of a 9% GDP expansion in FY22, with a clear K-shaped divergence amongst the formal and informal parts of the economy and the large gaining at the cost of the small. We expect the economy to maintain a similar 9% growth in FY23,” said Aditi Nayar, chief economist at domestic ratings agency Icra. She expects the percentage of double-vaccinated adults to rise to 85-90% by March 2022.
While the announcements of booster doses and vaccines for the 15-18 age group are welcome, it remains to be seen whether all existing vaccines would offer adequate protection against Omicron to avert a third wave in India, Nayar said.
Fresh restrictions being introduced by several states to curb the spread of Covid-19 may temporarily interrupt the economic recovery, especially in the contact-intensive sectors in Q4 of FY22, she added.
Nayar, however, expects the expansion in FY23 to be more meaningful and tangible than the base effect-led rise in FY22. “Based on our assumptions of GDP growth if the pandemic had not emerged versus the actual shrinkage that occurred in FY21 and the expected recovery in the next two years, net loss to the Indian economy from the pandemic during FY21-23 is estimated at ₹39.3 lakh crore, in real terms,” she said.
Icra believes that rising consumption will push capacity utilisation above the crucial threshold of 75% by the end of 2022.
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