NEW DELHI: Global investment banks — Goldman Sachs and Morgan Stanley — have sounded optimistic about India’s economic recovery and have forecast a strong rebound next year as economic activity gathers momentum and vaccine deployment to fight the dreaded Covid-19 pandemic is undertaken.
“We expect GDP growth to rebound to 13% in FY22 (above consensus expectations of 10.9%), after an expected 10.3% contraction in FY21. There is still a high degree of uncertainty around the outlook — and growth could significantly overshoot or undershoot these forecasts — depending on the course taken by the virus and vaccine-related developments in the coming year,” Goldman Sachs said in a note titled “Vaccine to Extend Rebound in 2022”.
The US investment banking giant had earlier forecast the Indian economy to contract 14.8% in 2020-21 due to the bruising impact of one of the strictest lockdowns to ward off the spread of the deadly virus. The government’s move to restart economic activity has seen a sharp improvement in a number of economic indicators and there are estimates now that the economy could move into positive territory in the third quarter — earlier than estimated.
Morgan Stanley said it maintains a constructive view of the economy and expects growth recovery from the second quarter of 2021.
“We expect the growth recovery to strengthen in 2021, with GDP growth improving to 9.8% from an estimated contraction of 5.7% in 2020. We estimate the economy to have recovered to the pre-pandemic level of output in 4Q20. The cyclical growth strength should be supported by a still accommodative monetary policy stance,” Morgan Stanley said in a note.
Source From : Times Of India