While the threat of the COVID-19 pandemic still looms, the ongoing conflict between Russia and Ukraine poses a significant challenge to the global recovery
While the threat of the COVID-19 pandemic still looms, the ongoing conflict between Russia and Ukraine poses a significant challenge to the global recovery
India’s GDP is expected to grow 7.4% in fiscal 2022-23, with rising prices fueled by the Russia-Ukraine conflict posing the biggest challenge to the global economic recovery, according to the Federation of Indian Chambers of Commerce & Industry ( FICCI). Economic Outlook Survey released on Sunday said.
According to the survey, the Reserve Bank of India (RBI) is expected to start a rate hike cycle in the second half of 2022, while repo rates are expected to increase by 50-75 basis points by the end of the current fiscal year.
The RBI is expected to continue supporting the ongoing economic recovery by leaving the repo rate unchanged in its policy review in April, the survey said.
“The latest round of FICCI’s Economic Outlook survey puts annual mean GDP growth forecast for 2022-23 at 7.4%, with minimum and maximum growth estimates of 6% and 7.8%, respectively,” the industry association said.
The mean growth forecast for agriculture and related activities has been set at 3.3% for 2022-23. The industrial and service sectors are expected to grow by 5.9% and 8.5%, respectively.
However, downside risks to growth continued to escalate.
While the threat of the COVID-19 pandemic still looms, the continuation of the conflict between Russia and Ukraine poses a significant challenge to the global recovery, according to the survey.
Rising international commodity prices are the biggest risk posed by the ongoing conflict, as Russia and Ukraine are global suppliers of key commodities, it said. The conflict, if prolonged, will further affect supplies of key commodities, including crude oil, natural gas, food, fertilizers and metals, he added.
The economists who took part in the survey also think global inflation is likely to peak in the first half of 2022 and moderate thereafter.
As India is a net importer to meet its energy needs, the sharp rise in crude oil prices represents a significant shock to India’s macroeconomic framework. In addition, the impact on the economy is expected to be more severe if the conflict prolongs, the report said Opinion poll.
The FICCI Economic Outlook Survey was conducted in March this year to gauge the response of economists from sectors such as manufacturing, banking and financial services. Economists were asked for their forecasts on key macroeconomic variables for 2022-23, Q4 (January-March) of FY22 and Q1 (April-June) of FY23, it said.
