Brickwork Revises Down India GDP Forecast; Nomura Says Business Activity Down 24%

By Aditya Raghunath — Brickwork Ratings, a domestic rating agency, has revised downwards its projection of India’s GDP growth for FY22 to 9% from 11% earlier. It said that the second wave of the COVID-19 pandemic has brought an abrupt halt to the country’s fragile economic recovery.

However, it said that the GDP outlook would be positive mainly due to the low base. It added that it doesn’t expect the economy to return to sustained growth until the virus spread is contained and a large part of the population is vaccinated. Sectors impacted by social distancing norms and sectors whose supply chains have been affected will take longer to return to pre-pandemic growth levels.

Meanwhile, Nomura Holdings Inc (T:) has said that business activity is down to 76% because of the impact of the pandemic. It said that as lockdowns take effect in multiple states, mobility has experienced a significant hit and there are signs that pain is spreading to wider aspects of the economy like GST e-way bills and rail freight.

However, it said that falling activity levels will have a muted impact on the economy and that it maintains its growth forecasts for the year. Nomura has said that it expects GDP to grow at 11.5% in 2021 compared to a contraction of 6.9% in 2020.

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