Chief Economic Advisor V Ananth Nageswaran on Tuesday said high-frequency data indicate a faster economic growth momentum and the 7 per cent GDP growth forecast for the current fiscal is very realistic.
He also said that there are ample indications that manufacturing is in good shape.
“Inflation is moderating and the pass-through from wholesale prices has run its course… We have some uncertainty related to monsoon due to El Nino activity… We need to address this with both supply side and monetary policy measures during the next fiscal Need to be ready.” year,” Mr. Nageswaran told reporters.
According to him, the GDP growth estimate of 6.5 per cent for the next fiscal is within the range of forecasts of OECD and other agencies like ADB, but there are downside risks.
“We need to be prepared for tighter financial conditions globally, meteorological uncertainties and geopolitical factors. 2023-24 may not see a major ticker shock as we saw in the early months of 2022-23 as 2022 But even then some underlying factors are still simmering and we need to be vigilant,” Mr. Nageswaran said.
He said that the sales of passenger vehicles, two wheelers and tractors are increasing and the real estate sector is also making a strong comeback. He said the unemployment rate is coming down and jobs are being created at lower wage levels.
Furthermore, Nageswaran said that all these indicators point to a broad-based growth momentum in the economy.
“…the growth rate that we need to achieve in the fourth quarter is roughly 5-5.1 per cent, which is capable of achieving 7 per cent real GDP growth.
“The trends in terms of high frequency data for Q4 2022-23 indicate that achieving the growth rate in Q4 is within the realm of possibility and hence the 7 per cent real GDP growth projection for 2022-23 Very realistic,” he said.
He was briefing reporters after the National Statistical Office (NSO) released GDP data for the December quarter, which showed growth slowed to 4.4 per cent mainly due to contraction in the manufacturing sector.
In the current financial year, the Indian economy grew by 19.5 percent and 23.9 percent in the June and September quarters, respectively.
Mr. Nageswaran said that quarter-on-quarter changes are less consequential and, since they are not seasonally-adjusted, should be viewed with caution. He said the broad picture shows that the economy is buoyant.
Manufacturing sector output, as measured by gross value added, contracted by 1.1 per cent in the third quarter of this fiscal as compared to a growth of 1.3 per cent in the year-ago period.
“Manufacturing appears to be slowing on the face of it due to rising input costs, but if you look at the PMI (Purchasing Managers’ Index) indicators, the manufacturing sector is in good health and the core sector performance in January tells us that we have Fairly strong manufacturing growth in the fourth quarter,” he said.
The Chief Economic Advisor also said that merchandise exports of goods and services are expected to touch USD 750 billion in the current fiscal as compared to USD 680 billion in the previous fiscal, a credible achievement considering the global growth slowdown in 2022. Is.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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