Eco Survey sees slower GDP growth in FY24

India's economy to do better in the remaining of this decade. Indian economy to grow faster once global shocks of pandemic, Russia-Ukraine war fade

Hyderabad: At least three shocks have hit the global economy since 2020, Economic Survey for 2022-23 has noted. In general, global economic shocks in the past were severe but spaced out in time. This changed in the third decade of this millennium.

It all started with the pandemic-induced contraction of the global output, followed by the Russian-Ukraine conflict leading to a worldwide surge in inflation. Then, the central banks across economies led by the Federal Reserve responded with synchronised policy rate hikes to curb inflation.

India's economy is projected to slow to 6-6.8 per cent in the fiscal year starting April - still remaining the fastest growing major economy in the world - as extraordinary challenges facing the globe will likely hurt exports, the Economic Survey said on Tuesday. The projection of India's gross domestic product (GDP) growth is higher than the 6.1 per cent estimate of the International Monetary Fund (IMF) and compares with the survey's estimated 7 per cent expansion in the current fiscal year (April 2022 to March 2023) and 8.7 per cent in the previous year. The survey that details the state of the economy was tabled in Parliament by Finance Minister Nirmala Sitharaman a day before she presents Union Budget 2023-24. The rate hike by the US Fed drove capital into the US markets causing the US Dollar to appreciate against most currencies. This led to the widening of the Current Account Deficits (CAD) and increased inflationary pressures in net importing economies.

The rate hike and persistent inflation also led to a lowering of the global growth forecasts for 2022 and 2023 by the IMF in its October 2022 update of the World Economic Outlook.

The frailties of the Chinese economy further contributed to weakening the growth forecasts.