BENGALURU- India’s path to economic recovery will be stronger than previously thought as fiscal expansion and vaccine hopes help the country heal from COVID-19, a Reuters poll of economists showed.
The world’s second-most populous country has begun a huge vaccination drive and a steep fall in new coronavirus cases over the past few months is supporting a recovery in Asia’s third-largest economy.
Alongside that, nearly 60 percent of respondents, 18 of 31, who responded to an additional question in the Jan. 13-25 poll said India’s federal budget, due on Feb. 1, would help a significant economic recovery in financial year 2021/22 and has already sent stocks to record highs.
“We expect global economic activity to return to normality in fiscal Q2 and India to grow in fiscal 2021/22, with government stimulus packages expecting to contribute,” said Hugo Erken, head of international economics at Rabobank.
“There is a strong sentiment the budget will aim to continue expenditure as growth is the only way India can come out of recent setbacks.”
The poll of over 50 economists showed the economy would grow 9.5 percent next fiscal year – the highest since polling began for the year in March 2020 – after contracting 8.0 percent in the current fiscal year.
It was expected to grow 6.0 percent in fiscal year 2022/23. The poll predicted the economy would grow 21.1 percent, 9.1 percent, 5.9 percent and 5.5 percent in each quarter of the 2021/22 fiscal year, largely upgraded from a poll taken two months ago.