The Economic Research Department of the country’s largest bank SBI has prepared a report. The SBI Ecowrap Research Report has revised the GDP estimates for the second quarter of the current financial year 2020-21. According to the report, GDP growth in the second quarter will be (-) 10.7 percent, compared to the earlier estimate of (-) 12.5 percent. This report has been prepared by Dr. Soumya Kanti Ghosh, Group Chief Economic Advisor of SBI.
SBI has made this change in the estimate of GDP growth based on 41 high-frequency indicators which are linked to the global economy apart from activities of industries and services.
The situation will improve in the third quarter
It has been said in the report that the economic recovery is accelerating and if it had been a bit faster in July and August, the results would have been very good. The SBI Business Activity Index shows that the economic situation is slowly improving and may be better in the third quarter of the current financial year. However, the subsequent quarter can be estimated only when the actual results of the second quarter are revealed. This time in October, GST collection has increased by 10 percent as compared to October last year but the real picture can be revealed only when GDP figures are revealed.
Recovery will depend on two things
This report of SBI says that further estimates will mainly depend on two things how the recovery from Corona epidemic is happening and how soon the vaccine is available. The two weeks following Diwali are important and need to be carefully monitored. As soon as the vaccine becomes available and consumer confidence increases, it will be possible to assess further. The report says that consumer confidence can be assessed in the third quarter of the next financial year.
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