The IMF has projected India’s economic growth rate to be 7.4 percent in 2022-23. This is the highest among the major economies. RBI has projected the growth rate to be 7.2 percent in the current financial year.
Signs of continuing strength in the economy
The country is in a better position than two months ago in terms of economic growth, inflation and global balance in the current financial year due to the policy measures of the government and the monetary policy measures of the Reserve Bank of India. Finance Ministry This has been said in the monthly economic review released on Friday. Regarding the price situation in the review, it has been said that with the softening of commodity prices globally, policy steps by the central bank and fiscal policies of the government will curb inflationary pressure in the coming months.
Inflation pressure will decrease
According to the report, there is a possibility of softening of inflationary pressure in India. This is due to the fall in the prices of important raw materials like iron ore, copper and tin in July 2022. These items are important in the domestic manufacturing process. Retail inflation moderated to 6.7 per cent in July 2022 from 7.01 per cent in the previous month. Despite the global challenges, the International Monetary Fund (IMF) has projected India’s economic growth rate to be 7.4 percent in 2022-23. This is the highest among the major economies. RBI has projected the growth rate to be 7.2 percent in the current financial year.
according to economic indicators
At the same time, the report said that some key figures like GST collection, PMI (Purchasing Manager Index), e-way bills are in line with the IMF’s estimate for the first four months of 2022-23. According to the review, the index of industrial production and the performance of eight core industries indicate strength in industrial activities. At the same time, PMI manufacturing reached an eight-month high in July. It shows increase in new business and production. According to the Finance Ministry, since the Russo-Ukraine war on the external front, there has been increased uncertainty among investors. This led to capital outflow from the country. This situation is not only in India but also in other emerging economies (EMEs). Apart from India, the exchange rate of currencies of other emerging economies also saw a fall during January to July this year against the US dollar. Foreign portfolio investors pulled out $48 billion from emerging economies during this period.
The confidence of foreign investors in India remains intact.
The report said that the confidence of global investors in India’s economic scenario remains. This is reflected in the net foreign direct investment (FDI) in the first quarter of 2022-23, which has remained strong at $13.6 billion. Whereas during the same period last year it was $ 11.6 billion. It added that India’s growth outlook for 2022-23 remains high and confirms a strong recovery. According to the Finance Ministry, the books of the private sector and banks are better. There is a desire to take loans and give loans. Barring a few setbacks such as trade balance due to rise in commodity prices, it appears that economic growth will maintain its momentum in the next financial year 2023-24 as well.