Friday, August 12, 2022
HomeMoney & LoansIndia's FY23 growth forecast cut to 7%, RBI to stay hawkish: FICCI

India’s FY23 growth forecast cut to 7%, RBI to stay hawkish: FICCI

MUMBAI (Reuters) – The Indian economy is expected to expand 7% in fiscal 2022/23, slower than a previous estimate of 7.4% and the central bank’s 7.2% projection, according to a survey by India’s leading industry body.

The Federation of Indian Chambers of Commerce and Industry’s (FICCI) quarterly survey, released on Thursday, said the war in Ukraine is likely to keep inflation high and dent consumer demand.

The Reserve Bank of India (RBI) was expected to stay hawkish to tackle elevated inflation, the survey of top independent economists, showed.

“CPI is anticipated to remain above the RBI’s tolerance band till the third quarter of FY2022-23 and may come within the tolerance level only after the fourth quarter,” the FICCI said in a press statement.

Annual consumer inflation has remained above the RBI’s 2%-6% tolerance band for six straight months to June, prompting economists in the survey to predict the RBI will hike the repo rate further to 5.65% by the end of the fiscal year in March 2023.

Most market participants expect the RBI to raise the repo rate by 50 basis points at its next policy review on Aug. 4, following a similar-sized hike to 4.90% last month.

“Major risks to India’s economic recovery include rising commodity prices, supply-side disruptions, bleak global growth prospects with the conflict prolonging in Europe,” the industry body said.

A slowdown in China, one of India’s biggest trade partners, would likely hurt exports and emerge as a crucial headwind, it added.

Morgan Stanley also lowered its forecast for India’s fiscal 2022/23 growth to 7.2% from 7.6% earlier this week, citing weakening global trade.


(Reporting by Anushka Trivedi; Editing by Sonali Desai)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

mail Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor



Please enter your comment!
Please enter your name here

Most Popular

Recent Comments

%d bloggers like this: