‘No Country Can Avoid Uncertainties in Global Market’: FM Sitharaman on 6.5% GDP Growth Forecast

Finance Minister Nirmala Sitharaman on Friday said uncertainties in the global market could not be avoided by any country, which included India. The comments came after the Economic Survey pegged India’s real GDP growth at 6.5%. LIVE Updates

Sitharaman told Network18’s Group Editor-in-Chief Rahul Joshi that the desirable GDP had to be tempered down in accordance with the global situation. The government has kept all uncertainties in mind and given its growth projections, she added.

In comparison to the predicted 7% growth in the current fiscal year (April 2022 to March 2023) and the 8.7% growth in the prior year, India’s real GDP is expected to expand by 6.5% in 2023–2024.

“Like the rest of the world, India too faced an extraordinary set of challenges in tightening financial conditions and supply chain disruptions from a prolonged war in Europe but “withstood them better than most economies”, the annual document detailing the state of the economy had said.

The survey highlighted the fact that “agencies worldwide continue to project India has the fastest growing major economy” despite the three shocks of Covid-19, the Russia-Ukraine war, and synchronised policy rate hikes by central banks around the world that led to an appreciation of the US dollar and a widening of the current account deficit (CAD) in net importing economies.

Due to several advantages India has over other countries amid the economic disruption brought on by the COVID-19 pandemic, the government believes India’s GDP growth in the 6–6.8% range, which is still less than the 7–% predicted for the current fiscal, would be doable.

The Economic survey noted four major positives for India’s growth forecast.

These were; inflationary impulses from China’s opening up turning out to be neither significant nor persistent, recessionary conditions in major advanced economies prompting a cessation of monetary tightening, and capital flows returning to India amid stable domestic inflation below 6%.

These factors all contribute to the limited health and economic effects of the Covid-19 infection epidemic on the rest of the world. The Economic Survey observed that these three variables will result in the fourth positive outcome, a rise in animal spirits that will further stimulate private sector investment.

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