Indian economy expected to grow 7-7.8% in FY23 despite global headwinds: experts.

According to a renowned economist and Vice Chancellor of BR Ambedkar School of Economics (BASE), NR Bhanumurthy, the Indian economy is currently experiencing many external challenges.

According to Bhanumurthy, unlike developed economies, India’s Covid-19 stimulus measures, especially fiscal policy interventions, are less inflationary and more pro-growth. He noted that global inflation expectations and the Ukraine crisis had heightened risks to the otherwise strong economy, with all domestic macroeconomic fundamentals well managed.

The PTI news service continued, “Despite global challenges, India is expected to reach 7% of GDP in the current year with improved agricultural production and a revitalized rural economy.”

Another eminent analyst and Institute for Industrial Development Studies (ISID), Nagesh Kumar, said high-frequency indicators point to strong growth momentum extending through 2022-2033, with real GDP growth around 7-7.8%.

According to French economist Guy Sorman, the high cost of fuel and fertilizer imports could have a significant negative impact on India. The social effects of slower growth will, however, be mitigated by the return of city workers to their villages, as India is still a predominantly agricultural economy.

Sorman predicted this could boost grain exports and agricultural production. In light of escalating inflation, supply chain hiccups and geopolitical tensions slowing the recovery, the World Bank has cut India’s economic growth forecast to 7.5% for the exercise in progress.

Unlike a contraction of 6.6% the previous year, India’s GDP grew by 8.7% in the last fiscal year (2021-2022).

Indian economy expected to grow 7-7.8% in FY23 despite global headwinds: experts - The New Indian ExpressIndian economy expected to grow 7.5% this year: Modi

India’s economy is expected to grow by 7.5% this year, making it the major economy with the fastest growing rate, according to Prime Minister Narendra Modi’s earlier statement on Wednesday.

He pointed to India’s digitalization expansion, saying it will reach $1 trillion in value by 2025 and that the administration is encouraging innovation in all sectors. In light of escalating inflation, supply chain issues and geopolitical concerns slowing the recovery, the World Bank has cut India’s economic growth forecast to 7.5% for the exercise in progress.

The country’s GDP grew by 8.7% in the last fiscal year (2021-2022) after contracting by 6.6% the previous year. The Reserve Bank of India maintained its GDP growth forecast of 7.2% for the current fiscal year in its third FY23 fiscal policy. Still, it warned of the negative effects of regional tensions and a downturn in the global economy.

Indian economy expected to grow 7-7.8% in FY23 despite global headwinds: experts

On high inflation, Bhanumurthy noted that CPI inflation peaked in March 2022 and fuel costs played a significant role in CPI inflation over the past three months.

He added that recent policy changes, such as the elimination of fuel taxes and an increase in policy rates, should smooth inflation and inflationary pressures over the coming quarters. “The delayed transfer of domestic fuel prices and rising global prices for fuel and other commodities would appear to have led to much faster inflationary pressure,” he said.

India’s retail price inflation eased to 7.04% last month, mainly due to lower food and petrol prices as the government and RBI intervened to curb soaring prices through fee reductions and increases in repo rates.

However, for the sixth consecutive month, inflation was above the central bank’s upper tolerance band of 6%. As CPI levels are elevated, Kumar pointed out that international headwinds from rising oil prices represent negative concerns for India’s economic outlook. However, Kumar said, “Given that the growth momentum is quite robust, I don’t think India is heading towards stagflation.”

Sorman argues that excessive government spending (which is largely justified to offset Covid-19) and low interest rates are the root causes of inflation, which has now spread to every country in the world.

strong GDP growth expected over the coming quarters: phdcci |  the financial express

“Everywhere, the financial bubble is bursting. India is no exception,” he added. Retail inflation eased to 7.04% in May, mainly due to lower food and petrol prices as the administration and the RBI stepped in to curb spiraling price rises through fee reductions and increases in repo rates.

However, inflation for the sixth consecutive month was above the Reserve Bank of India’s (RBI) upper tolerance target of 6%. When asked if India’s economy is doing better than it was eight years ago, Sorman said Narendra Modi was chosen as prime minister to fight public corruption and boost the economy.

“Of course, Modi has partially achieved his goals. Majority of Indians are doing better than they were eight years ago,” he added.

In New Delhi: According to preliminary estimates released by the Office for National Statistics, the Indian government has lowered its GDP (gross national product) growth forecast for 2021-2022 to 8.7%, down from its previous estimate of 8. 9%. (ONS).

Absolute GDP growth in 2021-22 was 1.5% higher than the year before the pandemic, demonstrating that the industry has recovered from the losses suffered during Covid. The government predicted the economy would grow by 9.2% in 2021-22 in its first advanced projections, which were released in January.

Economic difficulties caused by the third wave of the Covid-19 epidemic and an increase in inflation caused by the conflict between Russia and Ukraine are two factors that could have caused this reduction in expected growth.

India to grow fastest among major nations in FY23: finance ministry

Additionally, the government statistics office projects a staggering nominal GDP growth rate of 19.5% for 2021-22, up slightly from the previous projection of 19.4%. Real GDP takes into account inflation or a rise in prices over the previous year, while nominal GDP is calculated using current prices.

The general government budget deficit as a percentage of GDP in 2021-2022 has been reduced thanks to the sharp upward adjustment in nominal GDP.

If the latter is greater than the former, the difference between government revenue and expenditure is called the budget deficit. Against the adjusted target of Rs. 15.9 lakh crore, or 6.9% of GDP, the fiscal deficit for 2021-22 stood at Rs. 15.87 lakh crore, or 6.7% of GDP. GDP.

Chief Economic Advisor, V. Anantha Nageswaran, responded to the GDP growth estimates by telling the media that “India’s economy has consolidated its recovery in 2021-22 with most components exceeding pre-war levels. pandemic”.

However, he continues, “GDP growth in 2022-2023 faces global challenges such as high global commodity prices with high import dependence, tighter monetary policies in most countries, supply chain bottlenecks of supply and a likely global depression with an impact on India’s export growth.”

India’s GDP growth rate will be the fastest in the current series, which spans 17 years, even at a rate of 8.7%. Data prior to 2005 cannot be compared to the current series because, in 2015, the definition and methodology of GDP was changed to incorporate the gross value (GVA).

Edited by Prakriti Arora