On Thursday, the Reserve Bank of India (RBI) stated that its goal for 2023 is to control inflation and bring it into line with the desired level by 2024. The consumer price index (CPI) eased to 5.7% in December from 5.9% a month earlier, according to the most recent data, driven mostly by a strong decline in food inflation.
The inflation figures fall within the 6% RBI tolerance range. After reaching 7.4% in September, the inflation rate has been declining since then. The RBI anticipated that headline inflation would be 6.6% in the third quarter of FY23 and 5.9% in the fourth. The CPI inflation rate is expected to be 5% in Q1 FY24 and 5.4% in Q2 FY24 before declining to the required level of 4%.
The RBI anticipates that the Indian economy would remain resilient in terms of growth, notwithstanding a reduction in predicted GDP growth to 6.5% from 7% earlier this year due to three shocks: war, tightening monetary policy, and recurrent waves of the Covid epidemic. The information technology (IT) services sector, the domestic tech economy, and a surge in the establishment of manufacturing facilities by international corporations will drive the expansion in output.
The central bank stated in its article on the state of the economy that “even ardent detractors recognize that India has a compelling tale. “In 2023, India’s GDP will be worth $3.7 trillion at current prices and currency rates, continuing its lead over the UK as the fifth largest economy. According to projections from the International Monetary Fund, with a $5.4 trillion economy, India will rise from fourth to third place in 2025 and 2027, respectively.
According to the Q3FY23 figures released by IT sector companies, revenues were strong as a result of the rupee’s devaluation acting as a tailwind. Additionally, fiscal reform and a decrease in commodity prices will promote economic growth.The RBI stated that “2023 may likely be the ajar opening of a window in which India’s time on the global stage is arriving.”