India will continue to be the world’s fastest-growing major economy in the next financial year, with the official growth estimate likely to be between 6% and 6.8%, two people familiar with the development said. The Economic Survey, to be released on Tuesday, will forecast India’s growth in 2023-24.
On the high end, the estimate is higher than the latest estimates by the International Monetary Fund (IMF) and the World Bank, both added on condition of anonymity. The two multilateral agencies forecast real growth rates of 6.1% and 6.6% for FY24.
India chief policy advisor says:
Experts say global headwinds may affect India’s growth prospects mainly due to a decline in exports due to falling demand in major markets and high energy costs. EY India chief policy advisor DK Srivastava said growth in FY24 is expected to be in the range of 6-6.5%, especially as India’s exports decline due to falling global demand.
DK Srivastava said “Net exports have a negative contribution in FY23, which may continue in FY24 and may intensify due to the general global recession. But lower oil prices could help, It is a relief that global oil prices have moderated to some extent. If this continues, it may help boost the growth rate, provided the fiscal authority issues strong stimulus”.
This may require the budget to balance the imperative to reduce the fiscal deficit from the budgeted 6.4% in 2022-23 with the need to support growth, Srivastava explained. Despite the challenges, the consensus is that India is doing better than most other economies.
Tata Sons Chairman N said “India’s progress over the last decade has been quite remarkable. The position of the economy has moved from the tenth largest ten years ago to the fifth largest today. India is the fastest-growing major economy for the third consecutive year a bright spot in a global economy facing strong recessionary impulses, multi-decade high inflation, record levels of public debt and a squeeze on real household incomes”.
Chandrasekaran said in the introduction to the report “INDIA@100: Realizing the Potential of a USD 26 Trillion Economy”, released on the sidelines of the World Economic Forum in Davos. The first advance estimate by India’s National Bureau of Statistics puts growth at 7% in 2022-23.
