With a sharp deterioration in global growth prospects, high inflation and deteriorating financial conditions, fears of an imminent global recession have increased, the finance ministry said in a report released on Thursday. However, it also added that resilient domestic demand and reviving investment in India will drive economic growth going forward.
“In a world where monetary tightening has undermined growth prospects, India In the monthly economic review for October 2022, the Finance Ministry said, “The priority given to macroeconomic stability in the coming years is well positioned to grow at a moderately brisk rate.”
It added that continued macroeconomic stability, of which fiscal prudence is a part, and execution of various path-breaking policies such as Gati Shakti, National Logistics Policy and production-linked incentive schemes to boost the manufacturing share of employment are key for India. And vice versa. Development prospects.
“With a sharp deterioration in global growth prospects, high inflation and deteriorating financial conditions, fears of an impending global recession have increased. A global recession could impact the outlook for India’s export business; however, resilient domestic demand, strong financial A reactivated investment cycle coupled with systemic and structural reforms will provide momentum for economic growth going forward,” the report said.
Going forward, the current retail inflationary pressures are expected to ease with the pass-through of fresh kharif arrivals and lower input costs to consumers, which is also confirmed by RBI’s inflation projections for the next two quarters, it added. Has been.
India’s retail inflation eased to a three-month low of 6.77 per cent in October. Inflation in rural areas eased to 6.98 per cent in October 2022, while it softened to 6.50 per cent in urban areas.
It also said that so far in the current year, India’s food security concerns have been addressed and will continue to receive top priority from the government. Moderation in international commodity prices and new kharif arrivals are also set to ease inflationary pressures in the coming months.
“Hiring by firms is likely to improve in the coming quarters, driven by a rebound in new professional hiring as firms prepare for the lifting of COVID-19 restrictions and optimism from the vigorous sales volumes experienced during the festive season.” continues to get the benefit,” the finance ministry added.
India’s GDP data for the July-September quarter will be released later this month. In the last quarter ending June, India’s GDP was projected to grow by 13.5 per cent in the June 2022 quarter (Q1FY23), while the first quarter of 2021-22 recorded a growth of 20.1 per cent.
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