India’s economic recovery remains on track, closing in on its pre-second COVID wave levels. There is a broad-based revival in demand with a pick up seen in consumption, government spending, exports, and some investment segments led by the government sector. As such, we revise our Q1 FY22 GDP forecast higher to 19.8% YoY from an earlier estimate of 16%. As the pent-up demand effect wanes, sustaining demand recovery will require continued job creation and improvement in the quality of jobs. The domestic policy environment remains supportive. We expect a gradual move towards policy normalisation with the change in RBI’s accommodative policy stance in the Dec/Feb meeting.
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