“We are maintaining our forecast of 9% GDP expansion in FY12, with a clear K-shaped divergence between the formal and informal parts of the economy and large gains at the expense of small. We expect the economy to remain the same. 9% growth in FY23,” said Aditi Nair, chief economist at domestic rating agency Icra. He expects the percentage of adults double-vaccinated to increase to 85-90% by March 2022.
Nair said that while announcements of booster doses and vaccines for the 15-18 age group are welcome, it remains to be seen whether all current vaccines will provide enough protection against omicrons to prevent a third wave in India.
New restrictions are being imposed by several states to prevent the spread of Covid-19 That could temporarily hamper the economic recovery, especially in the contact-intensive sectors in the fourth quarter of FY22, he added.
However, Nair expects the expansion in FY12 to be more meaningful and tangible than the growth led by the Aadhaar effect in FY12. “Based on our assumptions of GDP growth, if the pandemic had not resulted in the actual shrinkage that occurred in FY 2011 and the expected recovery over the next two years, the Indian economy would be affected by the pandemic during FY 2011-23. The net loss is estimated at ₹39.3 lakh crore, in actuals,” he said.
Icra believes that rising consumption will push capacity utilization above the critical threshold of 75% by the end of 2022.