Indian economic growth to slow to 7 percent in 2022/23: Govt. forecast

Indian economic growth to slow to 7 percent in 2022/23: Govt. forecast

India’s government expects economic growth to slow in the financial year ending March, as pandemic-related distortions ease and pent-up demand for goods levels out going into 2023.

Gross domestic product (GDP) will likely rise 7 percent this fiscal year, compared with 8.7 percent the previous year, the Ministry of Statistics said in its first estimate for the period that put manufacturing growth at just 1.6 percent.

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The preliminary overall projection is lower than the government’s earlier forecast of 8 percent-8.5 percent, but above the central bank’s 6.8 percent.

The government uses the estimates as a basis for its growth and fiscal projections for the next budget due on February 1. That will be the last full budget before Prime Minister Narendra Modi is expected to run for a rare third term in elections due in summer 2024.

India’s economy rebounded after COVID-19 restrictions were eased around mid-2022, but the war in Ukraine has spurred inflationary pressures, prompting the central bank to reverse the ultra-loose monetary policy it adopted during the pandemic.

It has raised key interest rates by 225 basis points since May to 6.25 percent, the highest in three