The forecast for the Indian economy is anticipated to become even more complicated as a result of changes in the global economy, according to a study released by the finance ministry on Friday
In November’s Monthly Economic Review published by the ministry, it was noted that the external sector was still experiencing challenges brought on by the global slowdown.
In Delhi, The forecast for the Indian economy is anticipated to become even more complicated as a result of changes in the global economy, according to a study released by the finance ministry on Friday. In November’s Monthly Economic Review published by the ministry, it was noted that the external sector was still experiencing challenges brought on by the global slowdown.
But it said that a strong services export performance for the remainder of the year and inward remittances, which are anticipated to reach eight billion two hundred seventy-one million four hundred nineteen thousand two hundred Indian rupees this fiscal, in accordance with the World Bank, could minimize the negative effects of a growing current account deficit.
“Global economic trends are projected to complicate the outlook further as we approach 2024,” it stated. “Continued vigilance is a vital factor in sustaining India’s external resilience.”
It added that continuing commitment to macroeconomic stability will support both economic performance and investor interest in India. It was stated that no country, including India, could afford to rest on its laurels.
“The latter is currently fairly high. It requires nurturing. Going forward, India must concentrate on medium-term concerns including securing technology and resources for the energy transition and preparing its youth for the 21st-century economy while continuing with general government-level budget consolidation “made a note.
The good news is that a lot of hard work has been put in over the past several years, and a solid foundation has been established, it stated, on which the superstructure of a middle-income economy may be built.
Inflation pressures have been diminishing, according to the study, with retail and wholesale inflation reaching 11- and 21-month lows in November, respectively.
The WPI inflation rate is still falling, and the CPI inflation rate, which was mostly driven by the reduction in food inflation, was below the RBI’s upper tolerance limit of 6%.
Core inflation, on the other hand, is still stubborn and maintained at a high level of 6% in November 2022, largely due to greater pass-through of high manufacturing costs to consumer prices as demand keeps recovering quickly, the report stated.
It also emphasised that the government’s sustained commitment to asset development is evidenced by the real investment rate, which in Q2:2022-23 reached a high level of 34.6%. During the first seven months of 2022–23, the Center’s capital expenditure increased by 61.5%, reaching 4.1 lakh crore, or 54.6% of the available budget.
Private investment has picked up speed and is anticipated to continue to be optimistic, as seen by the increasing sectoral deployment of bank credit growth. With consistent FPI inflows, rebounding FPI inflows, and sufficient foreign exchange reserves covering imports for nine months, the external front is still strong. As a result, it claimed, the Indian rupee has outperformed other EMEs.