Chief Economic Advisor (CEA) V Anantha Nageswaran stated on Monday that India’s economic growth in the upcoming fiscal will probably surpass the International Monetary Fund’s (IMF) prediction of 6.1% because of increased capital formation. In addition, the CEA emphasized the necessity for fiscal consolidation in the Asia-Pacific area in light of the finance ministry’s ongoing work on Budget FY24 and the region’s already heightened inflationary pressure.
In September, India’s retail inflation rate increased to a five-month high of 7.41%. Through September, it had gone over the RBI’s (Reserve Bank of India) medium-term goal range of 2-6% nine times in a row. According to the CEA, the public digital infrastructure of the nation has likely reached a turning point and will aid in both growth and the formalization of the economy. Therefore, he noted, the baseline growth figure of 6% can perhaps increase by 0.5-0.8%.
The IMF just reduced India’s FY23 growth forecast from its July forecast to 6.8%, which is the largest reduction of any major country outside of the US. However, it kept its national projection for FY24. Of fact, India’s growth rates for this fiscal year and the following year, as forecasted by the IMF, would still be far higher than the 3.2% and 2.7% world economic growth rates that the agency forecasts.
“I actually believe that the growth rates for the upcoming years may be a little bit higher or a little bit better than what these statistics are, I believe that India’s capital formation cycle would do better after a decade of retrenchment,” Said, Chief Economic Advisor (CEA) V Anantha Nageswaran.