Scotiabank's 2021-23 Economic Preview Outlook for India
Scotiabank said that India's economy was recovering on the back of an improved COVID-19 situation and a resultant easing of movement restrictions.
In Q3 2021, India's real gross domestic product (GDP) expanded by 8.4% y/y, supported by solid gains in domestic demand and recovering industrial activity, wrote the bank in a note to clients.
Real GDP growth was expected to stabilize at around 7% y/y in 2022-2023, following an estimated 9% gain this year, noted Scotiabank.
Consumer and business sentiment was improving, supporting household spending and investment prospects, yet the evolving COVID-19 situation will remain the main factor impacting domestic demand momentum, pointed out the bank.
Persistently high core inflation complicated the Reserve Bank of India's (RBI) monetary policymaking at the time of nascent economic recovery, added Scotiabank. Inflationary pressures and financial stability considerations were expected to prompt India's central bank to commence a cautious monetary normalization phase in H1 2022.