NEW DELHI (Reuters) -India cut its forecast for economic growth in the year to the end of March to 9.2% on Friday from an earlier outlook of more than 10%, as disruptions due to the Omicron variant of coronavirus hit consumer sentiment and economic activity.
The new forecast for real GDP in 2021/22 compares with a contraction of 7.3% in 2020/21 – the fastest expansion among the major economies, the Ministry of Statistics https://mospi.gov.in said when releasing its first advance estimates for national income.
The economy has been on the mend after the government lifted mobility curbs in June to curb the coronavirus. But after a surge in Omicron cases this week, many private economists have cut growth estimates to near 9% from over 10% estimates earlier.
Reserve Bank of India had earlier predicted a growth of 9.5%.
Vivek Rathi, director at consultancy Knight Frank India, said the third wave of the virus had impacted the estimates.
“We hope to have a softer landing from the third wave and continue economic momentum without severe disruptions.”
India’s daily COVID-19 https://www.reuters.com/world/india/indias-new-covid-19-cases-hit-seven-month-high-117100-2022-01-07 cases jumped to 117,100 on Friday, a five-fold increase in a week and on course to overtake its previous infection peak as the fast-spreading Omicron variant replaces Delta in cities.
Manufacturing is now forecast to grow 12.5% this fiscal year compared with a 7.2% contraction in the previous year. Farm output may grow 3.9%, up from 3.6%.
Three waves of COVID-19 have pounded small businesses, and services like restaurants, tourism, educational institutions and retail, resulting in huge job losses.
The unemployment rate rose to four-month high of 7.9% in December, from 7% in the previous month, and number of those employed fell by 2.9 million from a year ago, data released by Mumbai-based think-tank Centre for Monitoring Indian Economy (CMIE) showed.
The statistics office will release economic growth data for the October-December quarter on Feb. 28, along with revised full-year growth estimates.
(Additional reporting by Chandini Monnappa in BENGALURU; editing by John Stonestreet and Hugh Lawson)
