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Ratings agency Acuite Ratings & Research has retained India's FY22 growth forecast at 10 per cent on the back of likely revival in consumption demand during the festive season.

The agency cited steady progress in vaccination and expected improvement in consumption driven pent-up demand among the key reasons for retaining the 10 per cent growth mark.

However, the 'Acuite Macroeconomic Performance Index' highlighted that the 'V-shaped' recovery witnessed after the severe second Covid wave lost a bit of steam in August-September 2021.

The index tracks the momentum in the economy in the aftermath of the Covid pandemic on a monthly basis, constructed on the basis of 16 high frequency macroeconomic indicators.

According to the agency, the trajectory of the index revealed that the impact of the second Covid wave was less severe from the economic perspective, and more importantly post the disruption in April-May 2021, with most of the economic activities having recouped their lost momentum.

"Based on the steady progress on vaccination, expected improvement in consumption driven by pent-up demand for goods and vengeance spend on services, favourable kharif crop estimates, export buoyancy as well as the continuing accommodative monetary and fiscal policy backdrop, we continue to hold on to our FY22 growth forecast of 10 per cent," said Suman Chowdhury, Chief Analytical Officer at Acuite Ratings & Research.

"However, a mild downside risk to our forecast could emanate from persistently high global commodity prices, an ongoing global energy crisis affecting coal and gas supplies and raw material shortages in some industries such as the automotive sector," he added.