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Motilal Oswal: India’s Real GDP To Contract By Approximately 5.2% In FY21  

Motilal Oswal: India’s Real GDP To Contract By Approximately 5.2% In FY21

A bus conductor displays Indian bank rupee notes for a photograph in Coonoor, Tamil Nadu, India. (Photographer Dhiraj Singh/Bloomberg)
A bus conductor displays Indian bank rupee notes for a photograph in Coonoor, Tamil Nadu, India. (Photographer Dhiraj Singh/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

Real Gross Domestic Product /Gross Value Added growth contracted by 23.9%/22.8% in Q1 FY21 (versus our forecast of down 19%/down 17.7% and market consensus of down18%/down18.8%).

Since Q1 FY21 was an exceptional quarter due to the unprecedented global crisis situation currently, real GDP/GVA numbers for the previous quarter are incomparable with the numbers for any preceding quarters.

That said, there were a few surprises on the downside as far as GDP and GVA components are concerned.

Private consumption declined 26.7% YoY (versus our expectation of 18% YoY decline); investments contracted 47.5% YoY in Q1 FY21 (versus our forecast of 30% YoY decline).

Notably, government consumption remained robust with growth of 16.4% YoY in Q1 FY21, the highest in 12 quarters and in line with our expectations.

External trade posted a surplus in Q1 FY21 (the third highest since FY96), thereby contributing positively to real GDP.

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Motilal Oswal Ecoscope.pdf

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