The Indian economy is expected to expand by 7.1% to 7.6% this fiscal year despite changing geopolitical conditions around the world, according to a research released on Wednesday.
Leading consultant Deloitte India noted that as 2021 came to a close, there was optimism in the air; however, the euphoria was shaken early this year when a wave of Omicron infections swept the nation and Russia’s invasion of Ukraine took place in February.
“These events exacerbated the pre-existing issues, such as increasing prices, supply shortages, and altering geopolitical realities throughout the world, with no clear end in sight.” And the economic fundamentals, which had been improving for a few months, abruptly deteriorated as a result of a confluence of negative factors, including rising commodity prices and disruptions in trade and financial transactions, the research added.
The forecast for growth is hampered by rising commodity costs, soaring inflation, supply constraints, and altering geopolitical conditions around the world. India’s economy would probably continue to grow at the highest rate in the world, it was underlined.
“Indian Economy is projected to increase at 7.1%–7.6% in 2022–2023 and 6.1%–6.7% in 2023–2024. As a result, India will continue to have the fastest-growing economy in the world over the coming years, propelling global growth “stated the report.
The Reserve Bank of India (RBI) forecasted 7.2% GDP growth for the current fiscal year ending in March 2023.
Deloitte India stated that it anticipates supply chain disruptions and inflation to persist for a while.
The local currency will probably regain some of the lost territory versus the US dollar, but not before the beginning of the next year. The global downturn and India’s comparatively strong economic rebound will strengthen the INR, it was claimed.
On Wednesday, the rupee lost 3 paisas and hit a record low versus the US dollar, closing at 79.62 (provisional).
According to Rumki Majumdar, an economist with Deloitte India, “among other things, the desire of global enterprises to look for more durable and affordable investment and export destinations during difficult times, could work in India’s favour.”
The research also stated that there will be major risks due to uncertainties in the global business ecosystem.
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