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India Ratings in its latest report has revised downwards its Gross Domestic Product (GDP) growth forecast for 2021-22 to 8.6 per cent from the consensus 9.2 per cent projected earlier. The National Statistical Organisation (NSO), which has forecast 9.2 per cent real GDP growth for the year, will release the second advance estimate of national income on February 27. According to an India Ratings analysis, NSO is likely to peg the FY22 real gross domestic product growth at Rs 147.2 lakh crore.

This translates into a GDP growth rate of 8.6 per cent, down from 9.2 per cent forecast in the first advance estimate released on January 7, 2022. The agency said the major reason for the likely downward revision is the upward revision of FY21 GDP to Rs 135.6 lakh crore in the first revised estimate of national income for FY21, which was released on January 31, 2022. As a result, GDP for FY21 is improved to (-) 6.6 per cent from the provisional estimate of (-)7.3 per cent released on May 31, 2021.

Besides this, the second revised estimate of national income for FY20 stood at 3.7 per cent compared to 4 per cent projected earlier while the third estimate retained FY19 growth at 6.5 per cent. The growth rates of GDP drivers from the demand side namely private final consumption expenditure, government’s final consumption expenditure, gross fixed capital formation have undergone a change due to these revisions, and quarterly GDP growth numbers are also expected to undergo a change this year.