Despite global monetary tightening, India is well positioned to grow at a “moderately strong rate” in the coming years on the back of macroeconomic stability, a Finance Ministry report said today.
It further said that with the arrival of kharif crops in the coming months, inflationary pressures will ease and at the same time job opportunities will increase with improving business prospects.
The ‘Monthly Economic Review for October 2022’ also cautioned that US monetary tightening is a “future risk”, which could lead to lower stock prices, weaker currencies and higher bond yields, resulting in a global recession. Borrowing costs may increase for many governments.
It said a sharp deterioration in global growth prospects, high inflation and deteriorating financial conditions have raised fears of an imminent global recession.
Spillovers of the global slowdown may dampen the outlook for India’s export business. However, resilient domestic demand, a re-energized investment cycle with a sound financial system and structural reforms will provide momentum for economic growth going forward.
The report said, “In a world where monetary tightening has weakened growth prospects, India is well positioned to grow at a moderately faster rate in the coming years due to the priority given to macroeconomic stability.” “
The ministry said, so far in the current year, India’s food security concerns have been addressed and will continue to receive top priority from the government.
It added, “Easier international commodity prices and new kharif arrivals are also set to ease inflationary pressures in the coming months.”
India’s wholesale and retail price inflation fell in October after remaining high for most of the year mainly due to supply chain disruptions following the outbreak of the Russia-Ukraine war in February.
Retail or CPI (Consumer Price Index) inflation fell to a 3-month low of 6.7 per cent, while wholesale or WPI (Wholesale Price Index) inflation stood at a 19-month low of 8.39 per cent.
Russia and Ukraine are among the most important producers of essential agricultural commodities, including wheat, corn, sunflower seeds and inputs such as fertilizers.
Together with other countries bordering the Black Sea, they make up the world’s bread basket.
The ministry said that with an uncertain macroeconomic outlook, the year 2022 also brought to the fore the vulnerability and interconnectedness of the global food system to shocks.
In the current year, untimely heat waves and deficient south-west monsoon affected India’s grain availability. However, export restrictions have ensured that the country’s needs are fully met.
With regard to the job situation, the ministry said that the improvement in economic activity across all sectors in India has led to an improvement in the overall employment situation in the country.
EPFO (Employees’ Provident Fund Organisation) sees double-digit growth in net payroll growth in September 2022, reflecting better formalization of the economy.
“Hiring by firms is likely to improve in the coming quarters, driven by a rebound in new business hiring as firms recover from the lifting of COVID-19 restrictions and the vigorous sales volumes experienced during the festive season Optimism pays off.” the ministry said.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
featured video of the day
Sensex crashes over 500 points, extends losses for third straight day