While the threat from the COVID-19 pandemic still looms large, the continuation of the Russia-Ukraine conflict is posing a significant challenge to global recovery.
While the threat from the COVID-19 pandemic still looms large, the continuation of the Russia-Ukraine conflict is posing a significant challenge to global recovery.
India’s GDP is projected to grow at 7.4% in the fiscal year 2022-23, with rising prices from the Russia-Ukraine conflict the biggest challenge to the global economic recovery, Federation of Indian Chambers of Commerce and Industry (FICCI) said on Sunday. This has been said in the Economic Outlook Survey released on
According to the survey, the Reserve Bank of India (RBI) may start the rate hike cycle in the second half of 2022, while the repo rate is expected to increase by 50-75 bps by the end of the current financial year.
RBI’s April policy review is expected to continue to support the ongoing economic recovery by keeping the repo rate unchanged, the survey said.
“The latest round of FICCI’s Economic Outlook Survey estimates annual average GDP growth at 7.4% for 2022-23, with the minimum and maximum growth forecast at 6% and 7.8%, respectively,” the industry body said.
The average growth forecast for agriculture and allied activities for 2022-23 has been kept at 3.3%. The industry and services sectors are projected to grow at 5.9% and 8.5%, respectively.
However, it said, downside risks to growth remain elevated.
The survey said that although the threat from the COVID-19 pandemic still persists, the continuation of the Russia-Ukraine conflict posed a significant challenge to global recovery.
It said rising international commodity prices is the biggest risk posed by the current conflict as Russia and Ukraine are global suppliers of major commodities. It added that if the conflict continues for a prolonged period of time, supplies of key raw materials, including crude oil, natural gas, food, fertilizers and metals, will be affected.
Economists participating in the survey also said that global inflation is likely to peak in the first half of 2022 and moderate thereafter.
With India being a net importer to meet its energy requirements, the sharp rise in crude oil prices represents a significant blow to India’s macro-economic structure. Moreover, the impact on the economy is expected to be more severe if the conflict continues, the survey said.
FICCI’s Economic Outlook Survey was conducted in March this year to assess the response of economists representing sectors such as industry, banking and financial services. It said economists were asked for their forecasts on key macro-economic variables for 2022-23, the fourth quarter (January-March) of FY22 and the first quarter (April-June) of FY23.