Indian economy to grow on strength of domestic demand despite global uncertainties

The Finance Ministry stated in its latest monthly economic report that despite external headwinds, the Indian economy is estimated to grow at 7 per cent in 2022-23. Real GDP estimates for Q3 of 2022-23 reaffirm the ability of the Indian economy to grow on the strength of its domestic demand even as a rise in global uncertainties slows global output. Growth momentum gathered in Q3 of 2022-23 is likely to be sustained in Q4, as reflected in the performance of High-Frequency Indicators for January/February 2023.

GST collections have now, in February 2023 crossed the Rs 1.4 lakh crore benchmark for twelve successive months. Increasing electronic toll collection levels reaffirms rising commercial activity, while robust energy demand is yet another evidence of strengthening economic activity. Overall, demand conditions have remained conducive to sustaining growth momentum as deduced from robust tractor sales, auto sales, high UPI transactions and double-digit credit growth.

Inflationary pressures eased in February, with a slight moderation in CPI inflation and WPI inflation softening to a 25-month low. With WPI inflation easing, its transmission to CPI inflation is soon expected. Forecasts by various international agencies show that inflation will moderate in FY24 compared to FY23 and is likely to remain in the range of 5.0-6.0 per cent, with risks evenly balanced.

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