- Friday, April 26, 2024
By: Shubham Ghosh
The Economic Survey released by the Indian government a day ahead of the presentation of the national budget on Wednesday (1) has said that the country’s economic growth is forecast to be 6.5 per cent in fiscal 2024 compared to seven per cent in the current fiscal.
The survey made a forecast of a baseline gross domestic product (GDP) growth of 6.5 per cent in real terms in fiscal 2024. However, despite the lower growth forecast compared to the current one, it would still make India one of the fastest among the big economies.
“The projection is broadly comparable to the estimates provided by multilateral agencies such as the World Bank, the IMF, and the ADB and by RBI, domestically. The actual outcome for real GDP growth will probably lie in the range of 6 per cent to 6.8 per cent, depending on the trajectory of economic and political developments globally,” the Economic Survey said.
While making the forecast, the survey mentioned limited health and economic fallout for the rest of the world from the current Covid-19 situation in China, leaving supply chains undisturbed in many countries, including India, NDTV reported.
It said more funds are likely to flow into India as advanced nations face “recessionary tendencies” while the south Asian nation’s inflation remains below six per cent.
This will lead “to an improvement in animal spirits” and boost private sector investment, the government survey, which reviews how the economy performed in the past year, said.
The economic growth will be supported by “solid domestic demand and a pickup in capital investment”, the government said. The inflation rate peaked at 7.8 per cent in April last year, the survey added.
However, there are also high risks, especially from global factors.
A long period of inflation has seen central banks across countries tighten financial conditions, the survey said, adding that this move is visible now in the form of slowing economic activity in advanced nations.
“Another risk to the outlook originates from the ongoing monetary tightening exercise. While the pace of rate hikes has slowed, major central banks have reaffirmed their hawkish stance on inflation,” the Economic Survey said.
Wednesday’s budget, which will be the final full-fledged one before the next general election in 2024, will be presented by finance minister Nirmala Sitharaman.
