Global organisations such as the IMF have observed that India has been doing better than several developed economies, as they have been bogged down by a recession and inflation. The focus on growth and higher capex while tackling inflation, has enabled India to stay resilient, but the global slowdown may soon disrupt its economic surge. India Ratings has contradicted the Reserve Bank of India by placing India's growth rate for FY24 at 5.9 per cent.
The country's central bank had earlier projected that the Indian economy will grow at a rate of 6.4 per cent in the next financial year. As the pent up demand will normalise, it won't be able to provide a thrust to the economy and exports will be dragged down by a dip in global demand. The ratings agency also mentioned that it will take more than a decade for India's economy to bounce back from the losses it suffered during the pandemic.
The lower prices of products such as metals, fuel and essentials, as well as subsidies for homegrown manufacturers will help, but won't be able to carry growth past the 6 per cent mark.
Although retail inflation has surged to 6.52 per cent once again, after remaning within the RBI's tolerance limit for two months, India Ratings says that it will fall below 6 per cent again. Although farming and services sectors will drive growth, it will be dragged back by lacklustre industrial performance.
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