Unlike the global economy, India won't face slowdown: RBI article

Unlike the global economy, India will not face a slowdown and maintain the pace of expansion achieved in 2022-23, an RBI article said on Tuesday. "We remain optimistic about India, whatever the odds," said the article on the state of the economy published on Tuesday.

The article said the NSO's end-February data release indicates that the Indian economy is intrinsically better positioned than many parts of the world to head into a challenging year ahead, mainly because of its demonstrated resilience and its reliance on domestic drivers.

"Even as global growth is set to slow down or even enter a recession in 2023 as global financial markets wager, India has emerged from the pandemic years stronger than initially thought, with a steady gathering of momentum since the second quarter of the current financial year," the article said.

The article also said that year-on-year growth rates do not reflect this pick-up of pace because by construction they are saddled with statistical base effects, and instead suggest a sequential slowing down through successive quarters of 2022-23 to an unsuspecting reader.

Authored by a team led by RBI Deputy Governor Michael Debabrata Patra, the article said India's real GDP can go up from Rs 159.7 lakh crore in 2022-23 to Rs 170.9 lakh crore against the current projection of Rs 169.7 lakh crore in 2023-24.

"This is simple arithmetic; hardly a hurray at half-time. Also, unlike the global economy, India would not slow down – it would maintain the pace of expansion achieved in 2022-23. We remain optimistic about India, whatever the odds," the article said.

Currently available forecasts of India’s real GDP growth for 2023-24, including those of the RBI, settle between 6 and 6.5 per cent.

With this rate of growth, India has emerged as the fastest-growing large economy in the world. World Bank and IMF have predicted a slowdown in the global economy and recession in some countries this year due to a combination of factors like persistent high inflation and war in Ukraine.

Global growth is slowing sharply, with worldwide economic output projected to be just 1.7 per cent in 2023, according to the latest analysis from the World Bank Group.

In January this year, World Bank said its economists were warning that the downturn would be widespread and any adverse developments risk pushing the global economy into recession.