Indian Growth estimate cut to 10.8% for next financial year outlook: Nomura Research

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According to one of leading Japanese Brokerage firm Nomura announcement India will have lower GDP growth than the expected to 10.8% from which earlier 12.6%, due to second wave of covid 19, which lead to state wise lockdown and industry shut down.

M&M have also informed about 10 to 15% of production cut this year due to this restriction of Covid and supply chain disruptions. Also seen the drop in activity level to 64.5% of pre pandemic level, and can see further reduction of 5% drop in future week.

We are seeing daily 4 lacs plus cases every day, and more than 3900 death in a row during this infection wave, which have lead to 20 and more state under partial or strict lockdown who are following every measure to avoid spread down of virus.

As per saying of Nomura, GDP drop estimate reflection will be seen starting from next week with sequential June quarter results, as “We expect a localised hit in Q2 (April-June period) and believe that medium-term tailwinds (like vaccine pivot, global recovery, easy financial conditions) remain intact,”

Even for current situation, RBI have informed to have estimate to have economy expand at 10.5% in FY22 where some of analyst have target of 8.2% only due to second wave.

“We would, however, caution that the drop in mobility exaggerates the hit to economic activity. International experiences suggest the correlation between mobility and GDP growth is much weaker during the second wave, due to more targetted restrictions and more pandemic-adept consumers and businesses,” it said.