PHD Chamber projects Q2 FY 2021-22 GDP growth at 8-10%

No. PR – 146

November 18th, 2021

New Delhi

The PHDCCI Economic and Business Momentum (EBM) Index

PHD Chamber projects Q2 FY 2021-22 GDP growth at 8-10%

The PHD Chamber of Commerce and Industry projects Q2 FY 2021-22 GDP growth at 8-10% and a double digit GDP growth trajectory at 10.25% in the full FY 2021-22 on the back of supportive Government policies, uptrend in the key economic and business indicators and resultant strong business confidence and positive consumer sentiments, said Mr Pradeep Multani, President, PHD Chamber of Commerce and Industry, in a press statement issued here today.

According to the PHDCCI Economic & Business Momentum (EBM) Index, the 25 lead economic and business indicators have shown a significant recovery at 101.6 for Q2 FY 2021-22 as compared to 96.0 for Q2 FY 2020-21, at the base of 2018-19 = 100.

Lead economic and business indicators have shown a higher growth in September 2021 as compared with September 2020. PHDCCI Economic & Business Momentum (EBM) Index at 101.1 for September 2021 is higher as compared with 96.5 for September 2020, said Mr Pradeep Multani.

Economic  recovery so far (Y-o-Y)

Source: PHD Research Bureau, PHDCCI EBM Index

Lead economic and business indicators such as SENSEX, FDI equity inflows, merchandise exports and services exports have shown a noteworthy improvement in September 2021 as compared to the September 2020, said Mr Pradeep Mulatni.

Sequentially, the PHDCCI EBM Index has shown a decline for September 2021 to the level of 101.1 as compared to 101.7 for August 2021, due to shortages of raw material, high input prices, among others, said Mr Pradeep Multani.

Economic recovery so far (Sequential)

Source: PHD Research Bureau, PHDCCI EBM Index

The quarterly movement of PHDCCI EBM Index and quarterly GDP growth rates are highly correlated at 0.8 as depicted in Chart-2, said Mr Pradeep Multani.

Source: PHD Research Bureau, PHDCCI EBM Index; GDP growth figures compiled from MOSPI; Q2 FY 2021-22 GDP figure is estimated by PHD Chamber

At this juncture, there is a need to address the high commodity prices and shortages of raw material to support the consumption and private investments in the country, said Mr Pradeep Multani.

The drivers of household consumption need to be further strengthened to enhance the aggregate demand as it will have an accelerated effect on expansion of capital investments, said Mr Pradeep Multani.

More and more direct benefit transfers needs to be enhanced for the urban and rural poor under the various welfare schemes, said Mr Pradeep Multani.

PHDCCI EBM (Economic and Business Momentum) Index has shown steady recovery from the lows of 78.3 for April 2020 to 100.3 for April 2021, 95.3 for May 2021 as compared with 85.7 for May 2020, 98 for June 2021 as compared to 91.6 in June 2020, 102.1 for July 2021 as compared to 95.5 in July 2020, 101.7 for August 2021 as compared to 95.9 in August 2020 and 101.1 for September 2021 as compared to 96.5 in September 2020 with a base of 2018-19=100.

PHDCCI EBM Index is a composite index of 25 lead economic and business indicators with base year at 2018-19=100, which considers the demand and supply indicators to present a broad perspective of the economy. The 25 indicators include the IIP Consumer durable goods, IIP Consumer non-durable goods, IIP Capital Goods, IIP Intermediate Goods, Coal, Crude Oil, Natural Gas, Petroleum Refinery Products, Fertilisers, Steel, Cement, Electricity, Consumption of Petroleum products, Export Merchandise, Export Services, India Freight Traffic, Credit to Agriculture, Credit to Industry, Credit to service sector, Personal Loans, GST Collections, SENSEX, FDI Equity Inflows, External commercial borrowings and Unemployment.

Full PHDCCI EBM Index report attached

PHDCCI EBM Index

Base: 2018-19=100

Source: PHD Research Bureau, PHDCCI EBM Index Note: For calculation purpose, the FDI figure for July, August and September 2021 are moving average of last 3 months; figures are rounded off.

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Media Division