Mumbai – Now according to a Reuters poll economists predict that India’s GDP grew by 15.2% in April to June 2022 Financial quarter. This is compared to India’s GDP during the same time period a year ago. This would make the last financial quarter India’s best for growth in a year.
Now, the official growth figures for the quarter will be released later today. If the forecasts are accurate the quarter will show the highest growth rate since April to June 2021, When India recorded a growth rate of 20.1%. However, the forecast is less than the Reserve Bank of India’s prediction which was 16.2%.
The economists predicted that April to June quarterly growth rate would be India’s best this year by a large margin. They predict that the growth rate will fall sharply to 6.2% from July to September, and expect 4.5% growth in October to December quarter.
One of the reasons for the depressed growth outlook is high inflation, of course, inflation has remained about the Indian Central Bank’s tolerance threshold for months. To combat it, the RBI has raised interest rates by 140 basis points since May 2022.
Economists expect further rate hikes are 15-25 basis points in the coming months. And in recent months, inflation has put a dent in consumer spending, which accounts for nearly 55% of India’s economic activity.
The high prices of food, and fuel in the last few months it’s affected households. China has reported low crop yields, Russia and Ukraine was still raging on, and a fall in global food supplies is predicted. Reports say that India missed all of this and is expected to cut its food exports in the face of food insecurity.
Sanctions of Russian oil have caused an energy crisis in Europe as you know and driven up the price of oil around the world. The rupee has depreciated by 7% against the dollar this year which has made imports more expensive as well.
The interest rate hikes by the RBI will also affect growth as companies are expected to curb their expansion plans because it will become more expensive to borrow money.
Photo via – Youtube.com/RBI
