The Survey document cited limited health and economic fallout for the rest of the world from the current COVID surge in China, leaving supply chains intact in many nations including India.

India’s latest Economic Survey has projected a baseline GDP growth of 6.5 per cent in real terms for fiscal 2023-24 (FY24). The growth in the 6-6.8 per cent range—less than the 7 per cent forecast for FY23—is possible due to certain advantages India has over other nations amid the economic disruption caused by the COVID-19 pandemic, the government hopes.

“The projection is broadly comparable to the estimates provided by multilateral agencies such as the World Bank, the IMF [International Monetary Fund], and the ADB [Asian Development Bank] and by RBI [Reserve Bank of India], domestically. The actual outcome for real GDP growth will probably lie in the range of 6 per cent to 6.8 per cent, depending on the trajectory of economic and political developments globally,” the document said.

As advanced economies face ‘recessionary tendencies’, while India’s inflation remains below 6 per cent, the country may see more inflow of money, it noted. This will lead to an ‘improvement in animal spirits’ and increase private sector investment.

The growth will be backed by ‘solid domestic demand and a pickup in capital investment’, it said.

Fears of a recession, however, have been heightened by mass layoffs by Big Tech in recent weeks.

But the risks are high as well, especially from global factors. A long period of inflation has forced central banks across the world to tighten financial conditions, the survey said, adding this tightening is visible now in the form of slowing economic activity in advanced economies.

The domestic inflation rate peaked at 7.8 per cent in April last year, the survey noted.

“Another risk to the outlook originates from the ongoing monetary tightening exercise. While the pace of rate hikes has slowed, major central banks have reaffirmed their hawkish stance on inflation,” the document said.

Fibre2Fashion News Desk (DS)