Economy Likely To Grow Around 10.5% In Current Fiscal
The economy is expected to grow at a rate of around 10.5 percent this year. Credit Suisse is the current fiscal year’s winner.Credit Suisse does not disclose absolute growth statistics in its forecasts as a matter of policy.Credit Suisse, a Swiss firm, expects the economy will continue to surprise and grow by up to 9% in the coming fiscal year. The firm expects growth to be higher than the average prediction of 8.4-9.5 percent for the current fiscal year, with a figure of about 10.5 percent.
Credit Suisse does not disclose absolute growth statistics in its forecasts as a matter of policy. However, extrapolation of available data and projections suggests that economic growth in 2022-23 might be as high as 9%, which is up to 400 basis points (bps) higher than consensus estimates, according to the brokerage.Credit Suisse’s Asia Pacific co-head of equity strategy and India equity strategist, Neelkanth Mishra, told PTI that the economic recovery has surprised positively, and he expects major improvements to the GDP prediction.
“For FY23, we predict GDP to be upgraded by four percentage points over consensus, since output should return to the pre-pandemic pattern rather than the present forecast.” “The economy is projected to continue to offer positive surprises, even though the recovery has been lopsided so far,” Mishra said on Thursday. “In the next three to six months, most low-income jobs should revive as well.”Mishra said the economy has the capacity to support stronger import growth, but warned that high energy prices could be a drag. If imported energy prices (crude oil, gas, coal, fertiliser, and palm oil) stay high, the rate of expansion may slow.
Low employment/re-employment in critical sectors like education, travel, building materials, and car manufacturing, which are still not back to pre-pandemic levels, could be another stumbling block. However, he noted that as the economy continues to open up, things should improve, aided by high seroprevalence.Other positives for stronger growth, according to him, are the recovery in consumer spending, good equity fund-raising, which has helped to replace risk capital lost during the pandemic, expanding IT demand globally, with roughly 5 lakh jobs in the pipeline, and a pick-up in housing construction.
On the markets, he added that additional upside in the metric is improbable because the country’s price-to-earnings premium of 21% over global stocks and 72% over developing markets is already too large.
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