Q3 GDP Preview: Economy to record double-digit growth (10% y/y) in FY2021-22, anticipates Barclays India

Q3 GDP Preview: In its Q3 GDP Preview document titled 'India Q3 GDP Preview: Gaining traction', Barclays India has said that India’s economy bounced back strongly in Q3 2021, led by a bigger rebound in services. Further, Barclays India says, "We anticipate the economy will record double-digit growth (10% y/y) in FY2021-22." 

Q3 GDP: Forecast

Barclays India says, "We forecast India’s economy expanded 9.6% y/y in Q3 21 (July-September, or Q2 of fiscal year 2021-22), aided by low base and a gradual reopening of contact-intensive services. Our slightly adjusted forecast (previous: 9.9%) indicates that the economy is still on track to grow in double digits for FY 21-22 at around FY2021-22 (10%), along with rapid growth in nominal activity given higher inflation as well."

Q3 GDP: Impact of monsoon cycle and other factors

"Despite a relatively uneven monsoon cycle, we reckon the impact on agricultural output is likely to be limited. Rural consumption indicators such as two-wheeler sales continue to underperform, but we do not see that being a material drag on activity," says Barclays India.

"Mining, construction and electricity consumption will revert closer to their pre-COVID growth rates, while supply shortages and logistic bottlenecks are impacting manufacturing performance. Semiconductor shortages have hit output, especially in sectors such as auto and ancillaries, while freight charges and supplier delivery times remain elevated," Barclays India added in its Q3 GDP Preview document note 'India Q3 GDP Preview: Gaining traction'.