Mumbai, August 19: India Ratings and Research (Ind-Ra) on Thursday revised its GDP growth forecast for FY22 to 9.4 percent year-on-year and said the economic recovery will depend on the progress of the vaccination drive. If India is able to vaccinate its entire adult (18 years-plus) population by December 31, then the GDP growth is expected to come in at 9.6 percent. Otherwise, it may slip to 9.1 percent.

"Going by the pace of vaccination, it is now almost certain that India will not be able to vaccinate its entire adult population by December 31," said Ind-Ra.

The agency's estimate suggests that 5.2 million daily doses would have to be administered from August 18 onwards to fully vaccinate more than 88 percent of the adult population as well as to administer single doses to the rest by March 31, 2022. GDP to Expand by Deceptively High 20% in Q1, to Be Lower Than Pre-COVID Levels, Says Icra.

Accordingly, Ind-Ra revised its GDP growth for FY22 to 9.4 percent because with the ebbing of Covid 2.0, several high-frequency indicators are showing a faster rebound than expected. But Kharif sowing is indicating a significant pick-up with the revival of southwest monsoon.

Besides, exports volume and growth showed a surprise turnaround in 1Q FY22. Yet, FY22 GDP will be 10.9 percent lower than the trend value. "With the Covid-19 pandemic still looming large on the Indian economy, Ind-Ra believes households are no longer hopeful of a significant upside to their income in the near to medium term."

This coupled with low consumer confidence and depleted savings is expected to limit the growth in consumption demand. At the same time, investments -- especially private investments -- have been down and out over the past several years for a variety of reasons and are unlikely to see a near-term turnaround, said Ind-Ra.

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