Mumbai: Rating agency Icra on Wednesday said while there is some evidence of the economic recovery becoming broad-based in the third quarter of fiscal 2022, it is yet to attain the durability being sought by the Monetary Policy Committee (MPC) as a precursor to policy transmission.
The agency expects the real GDP to expand 6-6.5 percent year-on-year in the third quarter of FY2022 (+8.4 per cent in Q2 FY2022). It also sees the RBI maintaining the status quo in the upcoming monetary policy review to be held in February.
Encouragingly, the quarterly data suggests a modest broad-basing of the recovery in Q3 FY2022, relative to Q2 FY2022, when compared to respective pre-COVID-19 volumes.
“However, the onset of the third wave of COVID-19 has triggered state-wise restrictions, which have expectedly interrupted the momentum in the ongoing month, reiterating that the recovery is yet to attain durability,” Nayar said in a report released on Wednesday.
The agency said the y-o-y performance of 10 of the 15 high-frequency indicators improved in December 2021 compared to November 2021.
These include generation of GST e-way bills, non-oil merchandise exports, electricity generation, two-wheeler output as well as aggregate deposits and non-food credit of scheduled commercial banks.
The report further said the y-o-y performance of nine of the 15 high-frequency indicators in December 2021 trailed the growth seen in October 2021.
FASTag toll collections and retail payments rose to all-time highs in December 2021, while the monthly mobility for retail and recreation rose above the level of baseline period for the first time since the onset of COVID-19, it said.