Stable domestic demand and growing private investment are the main factors supporting the growth of Indian economy and these factors will propel the Indian economy to surpass the global economy.
If supply chain disruptions in 2024 persist, it could impact trade flows, transportation costs, economic output, and inflation worldwide. India is quietly confident of weathering the emerging disturbances.
The growth estimates come days before Prime Minister Narendra Modi’s government presents its last budget before the country heads to a general election this summer.
Finance Minister Nirmala Sitharaman will present the budget on February 1, factoring in the growth projections.
The latest projection compares with the first advance estimates, where the economy was projected to expand 7.3 per cent in the current fiscal year, after growth of 7.2 per cent in 2022/23 and 8.7 per cent in 2021/22.
“The robustness seen in domestic demand, namely, private consumption and investment, traces its origin to the reforms and measures implemented by the government over the last 10 years,” the review said.
S&P Global Ratings expects India will remain the fastest-growing major economy for the next three years, putting it on track to become the world’s third-largest economy by 2030, overtaking Japan and Germany.
Strength in the financial sector and recent and future structural reforms will make it “eminently possible” for the Indian economy to grow above 7 per cent in the coming years, the review said.
India expects headline retail inflation to gradually slow, the review added, but it did not specify a time frame. Annual retail inflation rose to 5.69 per cent in December from 5.55 per cent the previous month.
