Union Finance Minister Nirmala Sitharaman. File
| Photo Credit: PTI
India’s financial momentum has been sustained nicely within the third quarter of 2022-23 and there’s trigger for cautious optimism because the slowdown in international financial exercise is just not mirrored in India’s efficiency of assorted high-frequency indicators, the Finance Ministry stated on December 23, 2022.
“Private consumption, bolstered by pent-up demand, reached its highest among all second quarters during the past 11 years at 58.4% of GDP. The investment rate also rose to be the highest among all the second quarters since 2012-13 at 34.6% of GDP, hinting at the beginnings of an investment cycle,” the ministry stated in its month-to-month financial overview of November.
The easing of retail and wholesale inflation ranges to five.88% and 5.85% in November, respectively, together with the moderation within the households’ inflation expectations as per a central financial institution survey, augurs nicely for augmenting consumption in rural and concrete areas within the upcoming months, the ministry famous.
The downsides of India’s widening present account deficit are anticipated to be restricted by a strong companies export efficiency by the remainder of the 12 months and by inward remittances, that are anticipated to the touch $100 billion this fiscal 12 months as per the World Bank, the ministry stated.
“Stable foreign direct investment (FDI) flows, resurgent foreign portfolio investment flows, and foreign exchange holdings that provide an import cover of nine months cushion the external front,” it famous. The general financial outlook ‘as we head into 2023’ will probably be difficult additional by international financial developments, the ministry stated, underlining that vigilance is a important side in sustaining India’s exterior resilience.
“No country can afford to sit on its laurels, India included. Continued commitment to macroeconomic stability will underpin both economic performance and investor interest in India. The latter is very high, currently. It needs to be nurtured,” it concluded.
