Goldman Sachs has used 9.1% of India’s GDP in 2022.

Goldman Sachs has used 9.1% of India’s GDP in 2022.

Goldman Sachs has used 9.1% of India’s GDP in 2022.

India’s economic recovery is expected to intensify in 2022, led by increased consumption, which is expected to increase the country’s gross domestic product (GDP) from 8 per cent to 9.1 per cent per annum (YoY). , After a sharp contraction in 2020, analysts at Goldman Sachs said in their recent Macro Outlook 2022 note.

“We expect a significant contribution to growth in 2022, as significant improvements in viral conditions and substantial progress in vaccination have led to a complete restart of the economy. We expect government capital spending to continue, new signs of private corporate capex recovery and a revival in housing investment, ”wrote Andrew Tilton, co-author of the report, co-authored by Santnu Sengupta, chief Asia-Pacific economist at Goldman Sachs and Suraj. Kumar.

This consumer-led growth, however, will bring its own challenges. On the one hand, Goldman Sachs expects core inflation to rise as manufacturers pass on the increase in input costs to consumers as demand recovers with a full economic re-opening. As a result, global research and brokerage houses have raised India’s headline consumer price inflation (CPI) from 5.2 per cent in 2021 to 5.8 per cent per annum in 2022.

Click here for a table of detailed estimates

Analysts at Goldman Sachs expect India’s current account deficit (CAD) to widen to $ 52 billion (1.5 per cent of GDP), driven by higher oil and non-oil imports due to the resumption of the domestic economy and, to a lesser extent, rising oil prices. From 21 27 billion (0.9 percent of GDP) in 2021 to 2022.

According to the Reserve Bank of India, Goldman Sachs, the repo rate is expected to increase by 75 basis points (bps) in 2022.

People at Morgan Stanley are also excited about the region’s growth rate. With the level of vaccination, the reduction of covid-led travel restrictions and the release of low-demand, they believe that the overall economic growth rate in the Asian region will reach 5.4 percent in 2022 and a consensus estimate of 5 percent.

“We see this recovery extending beyond the North Asian economies to India and the rest of the region under the leadership of ASEAN,” said Chetan Ahiya, an analyst at Morgan Stanley, his chief Asian economist. He has projected India’s GDP growth in 2022 at 7.5 per cent as against the consensus estimate of 6.8 per cent.

Against the backdrop of a more broad-based recovery in the region, Morgan Stanley expects Asian inflation to moderate to 2.3 percent (1.7 percent in 2021) in 2022. In the case of India, they saw an average inflation of 5 per cent in 2022 and the repo rate reached 5.5 per cent by the fourth quarter of 2022 (Q4-2022).

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