India's GDP 2022: India's GDP Growth forecast cut to 7 percent by FICCI Survey
India’s GDP 2022: The Federation of Indian Chambers of Commerce and Industry (FICCI) released its quarterly survey on July 21, 2022. The survey has slashed India’s GDP growth forecast to 7 percent from previous 7.4 percent in Fiscal Year 2022-23.
India’s GDP forecast for FY 2022-23 by FICCI Survey is slower than RBI’s projection of 7.2 percent. The survey noted that the war in Ukraine is likely to keep inflation high and dent consumer demand.
The Reserve Bank of India (RBI) is expected to keep a close watch on the global developments to tackle elevated inflation.
FICCI Survey on India’s GDP Growth: Know in 5 Points
1. According to the FICCI survey, the Consumer Price Index is anticipated to remain above RBI’s tolerance band till the third quarter of FY 2022-23.
2. The CPI may come within tolerance level after the fourth quarter of Fiscal Year 2022-23.
3. The annual consumer inflation has been above the RBI’s tolerance band of 2%-6% for six consecutive months to June.
4. Many experts expect RBI to raise the repo rate by 50 basis points during its next Monetary policy review meeting on August 4, 2022.
5. RBI had increase policy repo rate by 40 basis points to 4.40 on May 4, 2022. This was the first increase in the policy repo rate by RBI since May 2020.
6. The RBI Monetary Policy Committee also voted unanimously to increase the policy repo rate by 50 bps to 4.90 percent during its June review meeting.
Major Risks to Indian Economic Recovery
The major risks to India’s economic recovery include-
-Bleak global growth prospects
-Rising commodity prices
-Supply side disruptions
-Slowdown in China
|Note: The FICCI survey observed that a slowdown in China, which is one of India’s biggest trade partners, is expected to hurt exports and impact India’s economic growth.|
Morgan Stanley has also lowered its prediction for India’s economic growth in FY 2022-23 to 7.2 percent from previous 7.6 percent.