Page 30 - The Indiane EYE 070723

BUSINESS EYE JULY 07, 2023 | The Indian Eye 30

Major firms show faith in

India growth story

The growth to be driven by private consumption and investment, supported by government efforts to

enhance infrastructure, logistics, and the overall business climate

OUR BUREAU
New York/Mumbai
ndian economy is expected to
clock an average growth rate of
I6.7 per cent till 2026-27 fiscal driv-
en by domestic consumption, S&P
Global Ratings Senior Economist
(Asia Pacific) Vishrut Rana said on
Wednesday. He said the economic
growth in the current fiscal is expect-
ed to come in around 6 per cent, lower
than 7.2 per cent clocked in 2022-23.
“We are seeing some headwinds from
the trade side which is affecting activi-
ty and that is one of the factors that is
affecting growth this year,” Rana said
at a webinar.
The factors that are driving the
slowdown from 7.2 per cent growth
last fiscal are weaker external environ-
ment, moderation in pent-up demand,
and softening private consumption
activity, Rana said.
Reserve Bank of India has pro-
jected GDP growth in the current fis-
cal to be 6.5 per cent. But Rana said
there is a “strong tailwind” coming Major US tech giants like Amazon, Google, and Microsoft announced significant investments during Prime Minister Modi’s recent visit to the US
from the investment side and the in-
vestment outlook is looking signifi- 4.5% growth. Private spending ac- and 11.2% growth recorded in 2022. lion in FY2023, there is optimism for
cantly stronger. celerated to 2.8% (from 2.2% in Q4 The budget presented in February a rebound as major US tech giants
Meanwhile, GlobalData, a lead- 2022), public expenditure rebounded 2023 outlines a plan to increase capi- like Amazon, Google, and Microsoft
ing data and analytics company, has to 2.3% (-0.6%), and gross fixed capi- tal expenditure by 37.4% to $121.9 bil- announced significant investments
also said that India is emerging as a ray tal formation increased to 8.9% (8%). lion, providing substantial support for during Prime Minister Modi’s US visit
of hope and is positioned to achieve The economic growth in Q2 and the growth of the construction and re- in June 2023.
the highest GDP growth rate among Q3 2023 is expected to be driven by lated industries. GlobalData forecasts Amazon pledged an additional
major economies in 2023. The growth private consumption, supported by a the construction sector’s gross value $15 billion, bringing its total invest-
will be driven by robust private con- revival in rural demand and increased added (GVA) to witness an average ment to $26 billion by 2030. Google is
sumption and investment, supported manufacturing activity supported by annual growth rate of 11.1% from expected to open a fintech center in
by government efforts to enhance in- benign inflation. India’s annual infla- 2023 to 2025. Gujarat, and Microsoft emphasized
frastructure, logistics, and the overall tion rate dropped to 4.25% in May On the external side, India’s ex- the transformative potential of AI to
business climate. 2023, marking the lowest level since ports in May 2023 declined by 10.3%, improve the lives of Indians. These
However, a decline in external April 2021 and remaining closer to while imports fell by 6.6%, resulting initiatives are expected to support
demand may impact trade prospects RBI’s inflation target of 4%. in a trade deficit of $22.1 billion. This startups, accelerate digitization, foster
this year. Nonetheless, the country is In terms of sectors, financial in- marks the fourth consecutive month job creation, and help improve GDP
expected to maintain a solid pace with termediation, real estate, and busi- of export contraction, posing chal- growth in coming quarters.
a projected growth rate of 5.7%, rep- ness activities contributed 21.5% to lenges for economic recovery and the India is categorized as a manage-
resenting a slight slowdown from the the gross value added (GVA) in 2022, current account deficit. GlobalDa- able-risk nation and ranked 56th out of
7% growth experienced in 2022, followed by mining, manufacturing, ta projects the exports and imports 153 nations in the GlobalData Coun-
GlobalData’s latest report, “Mac- and utilities (20.0%) and agriculture growth to slow down to 4% and 3%, try Risk Index (GCRI Q1 2023). The
roeconomic Outlook Report: India,” (18.3%). In nominal terms, the three respectively, in 2023 from 4.2% and country’s risk score was lower in terms
reveals that India’s GDP grew by sectors are forecast to grow by 11.8%, 4.6% in 2022. of macroeconomic, political, and le-
6.1% on an annual basis in Q1 2023, 11.7%, and 11.7%, respectively, in Despite a decline in FDI from gal risk parameters when compared
surpassing the previous quarter’s 2023 as compared to the 15.1%, 13.2%, $84.8 billion in FY2022 to $71 bil- with the average score of the world.

www.TheIndianEYE.com