The Indian economy would expand by 7.1% to 7.6% in FY23: Deloitte India

14 Jul 2022 , 10:16 AM

Despite altering geopolitical conditions across the world, the Indian economy is expected to expand by 7.1% to 7.6% this fiscal year, according to research released by leading consultant Deloitte India on Wednesday. It said that as 2021 came to a close, there was hope 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.

The issues that already existed, such as rising inflation, supply shortages, and altering geopolitical realities worldwide, were made worse by these events, and there was no sign of a solution in sight.

The research stated that the economic fundamentals, which had been going upward a few months before, had abruptly worsened due to a convergence of headwinds that included rising commodity prices, disruptions in trade, and financial activities.

The forecast for growth is hampered by rising commodity costs, soaring inflation, supply constraints, and altering geopolitical conditions throughout the world. India's economy would probably continue to develop at the highest rate in the world, it was underlined.

"India 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 next 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 territories versus the US dollar, but not before the beginning of the next year. The global downturn and India's comparatively robust 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 at Deloitte India, "among other things, the desire of global enterprises to search for more durable and affordable investment and export destinations during difficult times, might work in India's favor." The research also stated that there will be major risks due to uncertainty in the global business environment.