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BIG STORY SEPTEMBER 02, 2022 | The Indian Eye 5

Union Minister for Civil Aviation Jyotiraditya Scindia addresses the ASSOCHAM CEO’s Round- Union Finance Minister Nirmala Sitharaman speaks at the launch of the book titled ‘India’s
table ‘The Roadmap for Robust Growth over Next Decade’ meeting in New Delhi (ANI) Vaccine Growth Story’ in New Delhi (ANI)

During the first quarter of 2021- remained a disappointing print, while the economy could get hindered due “India’s economic growth before
22, the GDP was 20.1 per cent. utilities have remained resilient since to tightening borrowing costs and el- the COVID-19 shock had materially
Many analysts and experts have the pandemic normalized.” evated input costs,” he added. slowed because of the impact of cor-
different views on the latest GDP data. According to Vivek Rathi, Di- Meanwhile, in another sign of porate-sector deleveraging on busi-
“From a GDP perspective, pri- rector - Research at Knight Frank concern, rating agency Moody’s In- ness investment. With the delever-
vate consumption grew much faster India, although domestic economic vestors Service has once again low- aging complete, corporate-sector
than expected, while the government activities remained resilient to global ered India’s economic growth fore- investment is showing early signs of
consumption growth was lower and headwinds during Q1 FY23, a high cast for 2022 to 7.7 per cent. a pickup, which could provide sup-
investments were slightly higher. level of inflation led to moderation In May, it downgraded India’s port to a continued business cycle
Notably, RBI expected 16 per cent in real GDP in the economy. “In Q1 GDP growth estimate for the current expansion through several quarters,
growth in Q1, with 6.2/4.1/4 per cent FY23, consumer inflation averaged calendar year to 8.8 per cent from supported by investment-friendly
growth in the subsequent quarters. 7.3 per cent. High global commodi- its earlier projection of 9.1 per cent government policies and the rapid
Assuming no change in Q2-Q4 pro- ty prices along with sharp rupee de- in March. “Our expectation that In- digitization of the economy.”
jections, today’s Q1 data suggests preciation led to increasing import dia’s real GDP growth will slow from However, inflation remains a
that RBI’s FY23 growth forecast will inflation leading to an overall price 8.3 per cent in 2021 to 7.7 per cent challenge with the Reserve Bank of
be revised down to 6.7 per cent from increase in the economy,” he said. in 2022 and decelerate further to 5.2 India having to balance growth and
7.2 per cent earlier. We, on the other “In the coming months, India’s per cent in 2023 assumes that rising inflation, while also containing the
hand, have revised our forecast to 6.5 economy would face headwinds pri- interest rates, uneven distribution of impact of imported inflation from the
per cent, up from 6.3 per cent earli- marily arising from a widening trade monsoons, and slowing global growth depreciation of the Indian currency
er,” said Nikhil Gupta, Chief Econo- deficit as a result of decelerating ex- will dampen economic momentum rupee, it added. Although inflation
mist at MOFSL group. ports due to the global demand slow- on a sequential basis,” the global rat- eased slightly to 6.7 per cent in July,
“Overall, it confirms that growth down. Additionally, investments in ing agency said. it remains above the central bank’s
recovery is not so strong in India. It target range of 2-6 per cent for the
ideally implies that monetary tight- seventh straight month.
ening should be not very aggressive. In August, the RBI raised the
However, it appears that the termi- policy repo rate for a third time by 50
nal repo rate will be 5.75-6 per cent bps to 5.4 per cent. So far, the RBI
in this cycle with 1-2 more rate hikes, has raised the repo rate, the interest
ending the cycle in December.” rate at which the central bank of a
Madhavi Arora, Lead Econ- country lends money to commercial
omist at Emkay Global Financial banks, by 140 points, thereby taking
Services, said: “The GDP print for it above pre-pandemic levels.
1QFY23 was largely in line with our “The central bank is likely to re-
expectations, growing 13.5 per cent, main hawkish this year and maintain
led by led by a recovery in the ser- a reasonably tight policy stance in
vices sector. The strong year-on-year 2023 to prevent domestic inflation-
growth partly also is led by a favor- ary pressures from building further,”
able base effect, as 1QFY22 growth Moody’s added.
was severely impacted by the Covid For year 2023, it pegged India’s
Delta wave. The GDP print was a GDP growth at 5.2 per cent. How-
mixed bag, largely a story of service ever, it said a quicker letup in global
sector rebound which also was visible commodity prices would provide sig-
in the private consumption print on Opposition parties have been protesting against inflation and unemployment nificant upside to growth.
the expenditure side.” across the country (ANI) It is a positive sign for growth but
“However, manufacturing has it may be a bit far away yet.

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