Acuité sees mild downside risk to it's FY22 and FY23 GDP growth forecast of 9.2% and 7.5%, both respectively - Acuité Macro Pulse - Mar-22

The Indian economy returned to a path of recovery in Feb-22 after a short setback in Jan-22 owing to the Omicron wave. While the third Covid wave was short lived in India the performance of certain economic indicators didn't witness a commensurate pickup Feb-22 as compared to Jan-22. This led to our proprietary AMEP (Acuité Macroeconomic Performance) index declining marginally by 0.5% MoM to 111.8 in Feb-22 from 112.4 in Jan-22. The sequential moderation needs to be seen, however also in the context of a lower number of working days in the month of February. Notably, with relatively lower severity of Omicron wave backed by the healthy vaccination coverage, the index on annualized basis expanded by 2.3% YoY in Feb-22 from 0.7% in Jan-22.

Acuité is pleased to share with you the fifteenth edition (Mar-22) of Acuité Macro Pulse, which also marks the end of the previous financial year. This monthly publication on the state of the economy is not only a comprehensive commentary on a wide spectrum of macroeconomic indicators, but it also endeavours to capture the interlinkages and draw insights on the emerging economic landscape.

Key takeaways from Growth:

1. The Indian economy returned to path of recovery in Feb-22 after a brief setback in Jan-22 owing to the Omicron wave. Covid cases continued to decline well into the month of Mar-22, allowing scale back of nearly all restrictions at the state-level.

2. Heading into FY23, the recovery is looking somewhat on a weaker footing owing to the outbreak of the Russia-Ukraine conflict. The geopolitical crisis has heightened the uncertainty, with crude and other commodity prices pushing to multi-year highs. This has clouded the domestic macroeconomic landscape.

3. Amidst expectation of higher inflation and likely disruption to global trade and growth and the domestic recovery in private investment still somewhat tentative, Acuité flags possible downside risks to our FY23 GDP growth of 7.5%.

4. Unfolding geopolitics and its impact remain on close watch.

Link to the report

Source : Equity Bulls

Keywords

FY22 FY23 GDPGrowth AcuiteRatings MacroPulse