India’s economy slowing at accelerated pace-Reuters
2023.02.24 01:36
India’s economy slowing at accelerated pace-Reuters
By Ray Johnson
Budrigannews.com – According to a poll of economists conducted by Reuters, India’s economic growth is likely to slow further as a result of weakening demand in the October-December quarter. Additionally, as a series of interest rate hikes weigh on activity, the economy is expected to lose more momentum.
In the survey conducted between February 10 and 24, 42 economists predicted that GDP growth would slow to 4.6% annually in the most recent quarter.
The economy had expanded by 13.5 percent from April to June, largely as a result of statistical distortions caused by the pandemic, before slowing to 6.3% from July to September.
In addition, the monthly survey revealed that growth in Asia’s third-largest economy was anticipated to slow further to 4.4% in the current quarter and average 6.0% in 2023/24, which was lower than the official government estimate of 6.5 percent that was released on January 31.
The October-December data, which are due on February 28, were widely forecast to range from 4.0% to 5.8%. However, all survey participants anticipated growth that would be lower than that of the preceding quarter, and three quarters of respondents anticipated growth that would be below 5%.
“Base effects are normalizing the annual numbers and lowering them. “Sakshi Gupta, principal economist at HDFC Bank, stated that manufacturing could be a drag and that support from agriculture might be lower.
She went on to say that investments held steady while exports and consumer demand were likely to have contributed to the slowdown on the demand side.
“Interest rates are rising in tandem with extremely high inflation. “Pent-up demand has also begun to moderate,” Gupta stated.
To combat inflation, the Reserve Bank of India has increased interest rates by 250 basis points since May, and it is likely to do so once more in April. Consumption and economic expansion are expected to be delayed as a result of those previous actions.
As major central banks around the world keep raising rates, external demand is likely to also moderate.
According to Upasana Chachra, chief India economist at Morgan Stanley (NYSE:), “We expect growth for the domestic economy to hold up, but a greater-than-anticipated spillover impact from weak global conditions…may have more pronounced implications for domestic growth in the near term.”
