The country achieved an economic growth rate of 7.2% in the financial year 2022-23. Earlier this month, the Reserve Bank of India had said that economic growth would be 6.5%. The latest reports from FICCI and CRISIL also indicate that they are paying close attention to the new global situation, especially the uncertainty over how the situation will impact the Gulf region.

Jagran Bureau, New Delhi. Amidst the threat of deepening global uncertainty, the country’s two largest institutions have expressed concern over the decline in the country’s growth rate in this financial year. FICCI, one of these industry bodies, said based on a survey of corporate, banking and financial sector economists that economic growth is likely to be 6.3% in 2023-24. Credit rating agency Crisil estimates that the growth rate will be 6%.

growth may be slow

The country achieved an economic growth rate of 7.2% in the financial year 2022-23. Earlier this month, the Reserve Bank of India had said that economic growth would be 6.5%. At some point, all the agencies are saying that growth will slow down.

The latest report by FICCI and CRISIL also advises to pay close attention to the new global situation. There remains uncertainty regarding the impact of the situation, especially in the Gulf region. In this context, CRISIL said India’s full year average retail inflation rate was 5.5%.

While this will be lower than the 7.2% inflation recorded in the last financial year, it will be well above the 4% target set by the Reserve Bank of India. FICCI’s survey shows that there is a possibility of a new round of increase in crude oil prices.

Global recession will affect the country’s economy

It is unlikely that the Reserve Bank of India will increase interest rates. Notably, both the institutions agreed that interest rates may also be reduced in the next financial year. CRISIL expects interest rate cuts in the first quarter of 2024-25 and FICCI expects the RBI to cut interest rates in the first two quarters of 2024-25.

There is a need to improve the transport system and FICCI has made it clear that under inflation management, full attention should now be given to the supply side. Recently it has been observed that the government controls the prices of pulses and grains by increasing the supply. To do this, attention will have to be paid to traffic. Many times, inflation goes out of control due to increase in prices of perishable products. This can be solved by improving the transportation system.

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The foundation of the domestic economy is strong. Both the institutions said that India’s domestic economic fundamentals are strong, but it is not that external factors have no impact on it. In particular, the impact of the global economic recession is very obvious. Its impact is clearly visible on India’s exports also. Other agencies’ estimates are 6.5 for the Reserve Bank of India, 6.3 for the World Bank, 6.3 for the Asian Development Bank, 6.3 for the International Monetary Fund and 6.3 for the OECD.

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