According to the finance ministry’s presentation of its Annual Economic Review for 2022–2023, India is in a better position than before to maintain its growth because the economy has continued to expand well since FY23.
The report issued a warning that variables that could slow growth include an increase in geopolitical tension, increased volatility in global financial systems, a dramatic price correction in global stock markets, a significant El Nio impact, and sparse trade activity and FDI inflows. This increase in growth projection pushes the momentum of expansion well into the current year. Many forecasting organisations are upbeat as they increase their growth projections for FY24. Macroeconomic forecasting organisations range from 6% to 6%.5% in their growth projections for the current fiscal year.
High-frequency indicators provide a positive picture of the situation of the economy, according to the report. With stronger growth in auto sales, fuel consumption, and UPI transactions, urban demand conditions are still strong. With strong growth in sales of two and three wheelers, rural demand is likewise on the road to recovery. A jump in service exports and an increase in remittances have contributed to reducing the current account deficit towards the end of FY23, even as GST collections and the Purchasing Managers’ Index (PMI) for the manufacturing and services sectors both continue to rise.
Macroeconomic management has been excellent despite the extraordinary global challenges of the past three years, which added to the balance sheet issues in the Indian banking and non-financial business sectors.